EXHBIT 10.10
AMENDED AND RESTATED CREDIT AGREEMENT
among
INNKEEPERS USA TRUST
and
INNKEEPERS USA LIMITED PARTNERSHIP,
as Borrowers
BANK OF AMERICA, N.A.,
as Administrative Agent
CREDIT LYONNAIS NEW YORK BRANCH,
as Syndication Agent
BANK ONE, N.A.,
as Documentation Agent
FIRST UNION NATIONAL BANK
and
PNC BANK, NATIONAL ASSOCIATION,
as Co-Agents
and
THE LENDERS NAMED HEREIN,
as Lenders
$130,000,000
AS OF
MAY 10, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ SECURITIES LLC and CREDIT LYONNAIS NEW YORK BRANCH,
as Joint Lead Arrangers and Book Managers
TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS AND TERMS...........................................................................1
1.1 Definitions.....................................................................................1
1.2 Time References................................................................................17
1.3 Other References...............................................................................17
1.4 Accounting Principles..........................................................................18
1.5 Joint and Several..............................................................................18
SECTION 2 COMMITMENT.....................................................................................18
2.1 Revolving Facility.............................................................................18
2.2 Borrowing Procedure............................................................................19
2.3 Letters of Credit..............................................................................19
2.4 Competitive Bid Facility.......................................................................22
SECTION 3 TERMS OF PAYMENT...............................................................................22
3.1 Notes and Payments.............................................................................22
3.2 Interest and Principal Payments................................................................22
3.3 Interest Options...............................................................................23
3.4 Quotation of Rates.............................................................................23
3.5 Default Rate...................................................................................23
3.6 Interest Recapture.............................................................................23
3.7 Interest Calculations..........................................................................24
3.8 Maximum Rate...................................................................................24
3.9 Interest Periods...............................................................................24
3.10 Continuations; Conversions.....................................................................25
3.11 Order of Application...........................................................................25
3.12 Right of Setoff; Adjustments...................................................................25
3.13 Booking Borrowings.............................................................................26
3.14 Increased Cost and Reduced Return..............................................................26
3.15 Limitation on Types of Borrowings..............................................................27
3.16 Illegality.....................................................................................28
3.17 Treatment of Affected Loans....................................................................28
3.18 Compensation...................................................................................29
3.19 Taxes..........................................................................................29
3.20 Fees...........................................................................................31
3.21 Extension of Maturity Date.....................................................................31
3.22 Option to Replace Lenders......................................................................32
SECTION 4 BORROWING BASE.................................................................................33
4.1 Borrowing Base.................................................................................33
4.2 Admission of Qualified Properties into the Borrowing Base......................................33
4.3 Negative Pledge Agreements.....................................................................35
4.4 Borrowing Base Covenants.......................................................................35
4.5 Failure to Comply With Borrowing Base Covenants................................................36
SECTION 5 CONDITIONS PRECEDENT...........................................................................37
5.1 Conditions to Initial Borrowing................................................................37
5.2 Conditions to all Borrowings...................................................................38
5.3 Conditions Generally...........................................................................39
SECTION 6 REPRESENTATIONS AND WARRANTIES.................................................................39
6.1 Purpose of Credit Facility.....................................................................39
6.2 Existence, Good Standing, Authority and Compliance.............................................39
6.3 Affiliates.....................................................................................40
6.4 Authorization and Contravention................................................................40
6.5 Binding Effect.................................................................................40
6.6 Financial Statements; Fiscal Year..............................................................40
6.7 Litigation.....................................................................................40
6.8 Taxes..........................................................................................40
6.9 Environmental Matters..........................................................................41
6.10 Employee Plans.................................................................................41
6.11 Properties; Liens..............................................................................41
6.12 Locations......................................................................................41
6.13 Government Regulations.........................................................................41
6.14 Transactions with Affiliates...................................................................41
6.15 Insurance......................................................................................42
6.16 Labor Matters..................................................................................42
6.17 Solvency.......................................................................................42
6.18 Full Disclosure................................................................................42
6.19 Exemption from ERISA; Plan Assets..............................................................42
6.20 Year 2000......................................................................................42
SECTION 7 AFFIRMATIVE COVENANTS..........................................................................43
7.1 Items to be Furnished..........................................................................43
7.2 Use of Proceeds................................................................................44
7.3 Books and Records..............................................................................44
7.4 Inspections....................................................................................44
7.5 Taxes..........................................................................................45
7.6 Payment of Obligations.........................................................................45
7.7 Expenses.......................................................................................45
7.8 Maintenance of Existence, Assets, and Business.................................................45
7.9 Insurance......................................................................................45
7.10 Preservation and Protection of Rights..........................................................46
7.11 Environmental Laws.............................................................................46
7.12 INDEMNIFICATION................................................................................46
7.13 REIT Status....................................................................................47
7.14 ERISA Exemptions...............................................................................47
7.15 Listed Company.................................................................................47
7.16 Properties.....................................................................................47
SECTION 8 NEGATIVE COVENANTS.............................................................................47
8.1 Payment of Obligations.........................................................................47
8.2 Employee Plans.................................................................................47
8.3 Transactions with Affiliates...................................................................47
8.4 Compliance with Governmental Requirements and Documents........................................48
8.5 Loans, Advances, and Investments...............................................................48
8.6 Dividends and Distributions....................................................................48
8.7 Sale of Assets.................................................................................48
8.8 Mergers and Dissolutions.......................................................................48
8.9 Assignment.....................................................................................48
8.10 Fiscal Year and Accounting Methods.............................................................48
8.11 New Businesses.................................................................................48
8.12 Government Regulations.........................................................................49
8.13 Interest Rate Agreements.......................................................................49
8.14 Subsidiary Guarantors..........................................................................49
SECTION 9 FINANCIAL COVENANTS............................................................................49
9.1 Interest Coverage Ratio........................................................................49
9.2 Fixed Charge Coverage Ratio....................................................................49
9.3 Adjusted Fixed Charge Coverage Ratio...........................................................49
9.4 Secured Indebtedness...........................................................................49
9.5 Total Indebtedness to Investments in Hotels....................................................49
9.6 Total Indebtedness to Implied Value............................................................50
9.7 Minimum Tangible Net Worth.....................................................................50
9.8 Unsecured Debt to Unencumbered Implied Value Ratio.............................................50
SECTION 10 DEFAULT........................................................................................50
10.1 Payment of Obligation..........................................................................50
10.2 Covenants......................................................................................50
10.3 Debtor Relief..................................................................................50
10.4 Judgments and Attachments......................................................................51
10.5 Government Action..............................................................................51
10.6 Misrepresentation..............................................................................51
10.7 Default Under Other Agreements.................................................................51
10.8 Validity and Enforceability of Loan Documents..................................................51
10.9 Management Changes.............................................................................51
10.10 Change in Control..............................................................................51
10.11 Plan Assets....................................................................................51
10.12 Default Under Operating Leases.................................................................51
SECTION 11 RIGHTS AND REMEDIES............................................................................52
11.1 Remedies Upon Default..........................................................................52
11.2 Waivers. .....................................................................................52
11.3 Performance by Administrative Agent............................................................52
11.4 Not in Control.................................................................................52
11.5 Course of Dealing..............................................................................52
11.6 Cumulative Rights..............................................................................53
11.7 Application of Proceeds........................................................................53
11.8 Certain Proceedings............................................................................53
SECTION 12 AGENTS AND LENDERS.............................................................................53
12.1 Agents.........................................................................................53
12.2 Expenses.......................................................................................55
12.3 Proportionate Absorption of Losses.............................................................56
12.4 Delegation of Duties; Reliance.................................................................56
12.5 Limitation of Agents' Liability................................................................56
12.6 Default........................................................................................57
12.7 Limitation of Liability........................................................................57
12.8 Relationship of Lenders........................................................................57
12.9 Benefits of Agreement..........................................................................57
12.10 Approval of Lenders............................................................................57
SECTION 13 MISCELLANEOUS..................................................................................58
13.1 Headings.......................................................................................58
13.2 Nonbusiness Days; Time.........................................................................58
13.3 Communications.................................................................................58
13.4 Form and Number of Documents...................................................................58
13.5 Survival.......................................................................................59
13.6 Governing Law..................................................................................59
13.7 Invalid Provisions.............................................................................59
13.8 Venue; Service of Process; Jury Trial..........................................................59
13.9 Amendments, Consents, Conflicts, and Waivers...................................................60
13.10 Multiple Counterparts..........................................................................61
13.11 Assignments and Participations.................................................................61
13.12 Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances....................63
13.13 Entirety.......................................................................................63
13.14 Amendment and Restatement......................................................................63
13.15 Restatement of Existing Credit Agreement.......................................................64
SCHEDULES AND EXHIBITS
Schedule 1 Parties, Addresses, Commitments, and Wiring Information
Schedule 2.1 IHI Lessees
Schedule 2.2 Summerfield Lessees
Schedule 4.1 Form of Borrowing Base Report
Schedule 4.2 Closing Date Borrowing Base Properties
Schedule 6.2 Jurisdictions of Incorporation, Chief Executive Office, and Jurisdictions
Schedule 6.7 Litigation
Schedule 6.9 Environmental Matters
Schedule 6.14 Affiliates Transactions
Exhibit A Borrowing Request
Exhibit B Compliance Certificate
Exhibit C LC Request
Exhibit D Form of Revolving Credit Note
Exhibit E Form of Subsidiary Guaranty
Exhibit F Form of Counsel Opinion
Exhibit G Form of Assignment and Acceptance
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT is dated as of May 10, 2000,
among INNKEEPERS USA TRUST, a Maryland real estate investment trust (the
"TRUST") and INNKEEPERS USA LIMITED PARTNERSHIP, a Virginia limited partnership
(the "PARTNERSHIP") (the Trust and the Partnership are individually called a
"BORROWER" and collectively called "BORROWERS"), each of the lenders that are a
signatory hereto or that becomes a signatory hereto as provided in SECTION
13.11(A) (individually, together with its successors and permitted assigns, a
"LENDER" and collectively, the "LENDERS"), BANK OF AMERICA, N.A., a national
banking association (formerly NationsBank, N.A.), as Administrative Agent (in
such capacity, together with its successors and permitted assigns,
"ADMINISTRATIVE AGENT") and as Issuing Bank (in such capacity, together with its
successors and permitted assigns, "ISSUING BANK"), CREDIT LYONNAIS NEW YORK
BRANCH, as Syndication Agent (in such capacity, together with its successors and
permitted assigns, "SYNDICATION AGENT"), BANK ONE, N.A., as Documentation Agent
(in such capacity, together with its successors and permitted assigns,
"DOCUMENTATION AGENT"), and FIRST UNION NATIONAL BANK and PNC BANK, NATIONAL
ASSOCIATION, as Co-Agents (in such capacity, "CO-AGENTS").
R E C I T A L S:
1. Reference is hereby made to that certain Credit Agreement dated as
of February 17, 1998, executed by Borrowers, Administrative Agent, the other
Agents defined therein, and the Lenders defined therein (the "EXISTING
AGREEMENT") pursuant to which such Lenders extended to Borrowers a revolving
credit facility.
2. Borrowers, Agents, and Lenders desire to amend and restate the
Existing Agreement as and pursuant to this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1
DEFINITIONS AND TERMS
1.1 DEFINITIONS. Unless otherwise indicated, as used in the Loan
Documents:
"ADJUSTED CAD" means, for the Trust as of any date of determination,
(a) Cash Available for Distribution for the fiscal year most-recently ended,
PLUS (b) Designated Net Proceeds, MINUS (c) all regularly scheduled principal
payments in respect of all Liabilities of the Companies during the most-recently
ended twelve (12) month period ending on or before the date of determination,
MINUS (d) THE GREATER OF (i) all Distributions by the Trust during the
most-recently ended twelve (12) month period ending on or before the date of
determination, and (ii) the amount of Distributions required to be paid during
such period in order for the Trust to qualify as a REIT.
"ADJUSTED FFO" means, for the Trust as of any date of determination,
(a) Funds from Operations for the fiscal year most recently ended, PLUS (b)
Designated Net Proceeds, MINUS (c) all regularly scheduled principal payments in
respect of all Liabilities of the Trust during the most-recently ended twelve
(12) month period ending on or before the date of determination, MINUS (d) THE
GREATER OF (i) all Distributions by the Trust during the most-recently ended
twelve (12) month period ending on or before the date of determination (other
than redemptions or purchases of the Trust's Stock), and (ii) the amount of
Distributions required to be paid during such period in order for the Trust to
qualify as a REIT.
"ADJUSTED EBITDA" means, for any Person for any period, (a) EBITDA,
MINUS (b) to the extent not already deducted from EBITDA, all ground lease
payments, MINUS (c) a Capital Expenditure reserve equal to THE GREATER OF (i)
four percent (4%) of Gross Room Revenue for such period with respect to all
Properties owned by such Person, and (ii) any reserves required under all
Operating Leases of such Person during such period.
"ADJUSTED EURODOLLAR RATE" means, for any Eurodollar Borrowing for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined by Administrative Agent to be equal to the
quotient obtained BY dividing (a) the Eurodollar Rate (LIBOR) for such
Eurodollar Borrowing for such Interest Period BY (b) one (1) MINUS the Reserve
Requirement for such Eurodollar Borrowing for such Interest Period.
"ADJUSTED FIXED CHARGES" means, for any Person for any period, THE SUM
OF (a) all Debt Service during such period, (b) all Distributions paid or
payable during such period in respect of any preferred Stock of such Person, and
(c) all actual Capital Expenditures during such period.
"ADJUSTED NOI" means, for any Hotel or any Borrowing Base Property for
any period, (a) all lease payments pursuant to the Operating Lease for such
Hotel or Borrowing Base Property, MINUS (b) any ground lease payments, MINUS (c)
appropriate accruals for items such as annual taxes, insurance, or other
operating expenses payable by the owner (as opposed to the applicable Lessee) of
such Hotel or Borrowing Base Property reasonably determined by Administrative
Agent with respect to such Hotel or Borrowing Base Property, MINUS (iv) a
Capital Expenditure reserve equal to THE GREATER OF (A) four percent (4%) of
Gross Room Revenue for such period, and (B) any reserves required under the
Operating Lease for such Hotel or Borrowing Base Property, all as determined in
accordance with accounting principles reasonably acceptable to Administrative
Agent, consistently applied. If the Lessee of any Hotel or Borrowing Base
Property is a wholly-owned Consolidated Affiliate of the Trust, then Adjusted
NOI shall include the Net Income of such Consolidated Affiliate attributable to
such Hotel or Borrowing Base Property.
"ADMINISTRATIVE AGENT" is defined in the preamble.
"AFFILIATE" of a Person means any other individual or entity who
directly or indirectly controls, or is controlled by, or is under common control
with, that Person. For purposes of this definition "CONTROL," "CONTROLLED BY,"
and "UNDER COMMON CONTROL WITH" mean possession, directly or indirectly, of
power to direct (or cause the direction of) management or policies (whether
through ownership of voting Stock, by contract, or otherwise).
"AGENTS" means Administrative Agent, Syndication Agent, and
Documentation Agent, and "AGENT" means any one of the Agents.
"AGREEMENT" means this Credit Agreement, as modified, amended,
supplemented, or restated from time to time.
"APPLICABLE LENDING OFFICE" means, for each Lender and for each Type of
Borrowing, the "LENDING OFFICE" of such Lender (or of an Affiliate of such
Lender) designated for such Type of Borrowing on SCHEDULE 1 or such other office
of such Lender (or an Affiliate of such Lender) as such Lender may from time to
time specify to Administrative Agent and Borrowers by written notice in
accordance with the terms hereof as the office by which its Borrowings of such
Type are to be made and maintained.
2
"APPLICABLE MARGIN" means, as of any date of determination:
(a) If the Trust does not have an Investment Grade Rating on such
determination date, then the interest margin over the Base Rate or the Adjusted
Eurodollar Rate, as the case may be, based upon the Total Indebtedness to
Implied Value Ratio, as stated in the table below:
================ ================================= ================================ ================================
TOTAL INDEBTEDNESS TO IMPLIED APPLICABLE MARGIN FOR APPLICABLE MARGIN FOR
LEVEL VALUE RATIO EURODOLLAR BORROWINGS BASE RATE BORROWINGS
================ ================================= ================================ ================================
1 Greater than 35% 1.625% 0.75%
---------------- --------------------------------- -------------------------------- --------------------------------
2 Less than or equal to 35%, 1.50% 0.75%
but greater than 25%
---------------- --------------------------------- -------------------------------- --------------------------------
3 Less than or equal to 25% 1.40% 0.75%
================ ================================= ================================ ================================
The Applicable Margin determined above in effect at any time (whether in the
middle of an Interest Period or otherwise) is based upon the Total Indebtedness
to Implied Value Ratio as determined from the Current Financials and related
Compliance Certificate then most-recently received by Administrative Agent,
effective on the third (3rd) Business Day following receipt. If Borrowers fail
to timely furnish to Administrative Agent any Financial Statements and related
Compliance Certificate as required by this Agreement, then the maximum
Applicable Margin applies from the date those Financial Statements and related
Compliance Certificate are required to be delivered and remain in effect until
Borrowers furnishes them to Administrative Agent.
(b) If the Trust has an Investment Grade Rating on such determination
date, then the interest margin over the Base Rate or the Adjusted Eurodollar
Rate, as the case may be, that corresponds to the ▇▇▇▇▇'▇ Rating AND the S & P
Rating set forth below on the date of determination:
============ ==================== ==================== ============================== ==============================
APPLICABLE MARGIN FOR APPLICABLE MARGIN FOR
LEVEL ▇▇▇▇▇'▇ RATING S & P RATING EURODOLLAR BASE RATE
BORROWINGS BORROWINGS
============ ==================== ==================== ============================== ==============================
1 Baa3 BBB- 1.375% 0.5%
------------ -------------------- -------------------- ------------------------------ ------------------------------
2 Baa2 BBB 1.30% 0.25%
------------ -------------------- -------------------- ------------------------------ ------------------------------
3 Baa1 or better BBB+ or better 1.225% 0%
============ ==================== ==================== ============================== ==============================
For purposes of the foregoing: (a) if the ▇▇▇▇▇'▇ Rating and the S & P Rating
shall fall within different LEVELS, then the Applicable Margin shall be
determined by reference to the numerically lower LEVEL (E.G., if the S & P
Rating is in LEVEL 1 and the ▇▇▇▇▇'▇ Rating is in LEVEL 2, then the Applicable
Margin shall be determined by reference to LEVEL 1); and (b) if only one of the
▇▇▇▇▇'▇ Rating or the S & P Rating shall be in effect, then Borrowers may
substitute the corresponding rating of Duff & ▇▇▇▇▇▇ Credit Ratings Co., Fitch
Investors Service, L.P., or their successors or another ratings agency
acceptable to Administrative Agent. Each change in the Applicable Margin shall
be effective commencing on the third (3rd) Business Day following the earlier to
occur of (i) Administrative Agent's receipt of notice from Borrowers, as
required in SECTION 7.1(H), of a change in the ▇▇▇▇▇'▇ Rating or the S & P
Rating, and (ii) Administrative Agent's actual knowledge of a change in the
▇▇▇▇▇'▇ Rating or the S & P Rating.
3
(c) Administrative Agent shall promptly notify each Credit Party and
Borrowers of any change in the Applicable Margin, PROVIDED THAT the failure to
provide such notice shall not affect the effective date of any such change.
"APPROVED COSTS" means, for any Hotel or any Borrowing Base Property,
THE SUM OF the acquisition, construction, and other capitalized costs of such
Hotel, whether in the form of cash, property, liabilities assumed, or other
consideration. If the Lessee of any Hotel or Borrowing Base Property is a
wholly-owned Consolidated Affiliate of the Trust, then Approved Costs with
respect to such Hotel or such Borrowing Base Property shall include, without
duplication, the purchase price of any predecessor Operating Lease paid to the
immediately prior Lessee that was not a Consolidated Affiliate of the Trust.
"APPROVED FRANCHISE" means any "Marriott International, Inc.," "Hilton
Hotels Corporation," "Bass Hotels & Resorts," or "Wyndham International, Inc."
franchise or license or another franchise or license approved by Required
Lenders in writing.
"BASE RATE" means, for any day, THE GREATER OF (a) THE SUM OF the
Federal Funds Rate PLUS one-half of one percent (0.5%), and (b) the annual
interest rate most recently announced by Administrative Agent as its prime rate
(or, if the Person then acting as Administrative Agent under this Agreement is
not a bank organized under the Governmental Requirements of the United States or
any State, then the rate announced by Bank of America, N.A., or any successor
thereof, as its prime rate) in effect at its principal office, automatically
fluctuating upward and downward with and as specified in each announcement
without special notice to Borrowers or any other Person (which prime rate may
not necessarily represent the lowest or best rate actually charged to a
customer).
"BASE RATE BORROWING" means a Borrowing bearing interest at the Base
Rate PLUS the Applicable Margin.
"BORROWING" means (without duplication) any amount disbursed by (a)
Lenders to or on behalf of any Borrower under the Loan Documents, or (b) any
Lender in accordance with, and to satisfy the obligations of any Borrower under,
any Loan Document.
"BORROWING BASE" is defined in SECTION 4.1.
"BORROWING BASE PROPERTIES" means each of the Qualified Properties
owned by an Obligor and approved by Required Lenders for inclusion in the
Borrowing Base in accordance with SECTION 4, and "BORROWING BASE PROPERTY" means
any one of the Borrowing Base Properties.
"BORROWING BASE REPORT" means a report in substantially the form of
SCHEDULE 4.1 certified by a Responsible Officer of each Borrower, setting forth
in reasonable detail the total number of Rooms, date placed in service, date
acquired, property location, type, Approved Costs, room revenue, base rent,
lower tier, upper tier, threshold, percentage rent, annual real estate taxes,
annual insurance, ground rents, capital expenditure reserves, Adjusted NOI, and
a calculation of the Implied Value for each of the Borrowing Base Properties
(individually and in the aggregate).
"BORROWING DATE" means (a) for any Borrowing (i) the date for which
funds are requested by Borrowers, or (ii) the date any Borrowing is Converted
hereunder to another Type of Borrowing, and (b) for any LC, the date in which an
LC is requested by Borrowers.
"BORROWING REQUEST" means a request substantially in the form of
EXHIBIT A and signed by a Responsible Officer of Borrowers.
4
"BUSINESS DAY" means (a) for all purposes, any day other than Saturday,
Sunday, and any other day that commercial banks are authorized by any
Governmental Requirement to be closed in Texas or New York, and (b) for purposes
of any Eurodollar Borrowing, a day that satisfies the requirements of CLAUSE (A)
and is a day when commercial banks are open for domestic or international
business in London.
"CAPITAL EXPENDITURES" means any expenditures by a Person for an asset
that will be used in years subsequent to the year in which the expenditure is
made or which is properly classified in the relevant financial statements of
such Person in accordance with GAAP as a capital asset; PROVIDED, HOWEVER, that
"CAPITAL EXPENDITURES" shall not include expenditures incurred in connection
with (a) Hotels under construction, (b) Hotels that are being substantially
refurbished or rehabilitated, or (c) a franchisor's or licensor's product
improvement plan.
"CAPITALIZATION RATE" means, with respect to any Hotel or any Borrowing
Base Property (a) as of any determination date from the Closing Date through
December 31, 2000, eleven percent (11%) and (b) as of any determination date
during any calendar year thereafter during the term of this Agreement, the
capitalization rate reasonably determined by Required Lenders on a
state-by-state basis for such calendar year subject to the provisions of SECTION
4.1(B).
"CAPITAL LEASE" means, for any Person, any capital lease or sublease
that has been (or under GAAP should be) capitalized on a balance sheet of such
Person.
"CASH AVAILABLE FOR DISTRIBUTION" means, for any Person for any period,
Funds from Operations LESS Capital Expenditures during such period.
"CASH EQUIVALENTS" means (a) investments and direct obligations of the
United States of America or any agency thereof, or obligations fully guaranteed
by the United States of America or any agency thereof, provided that such
obligations mature within one (1) year of the date of acquisition thereof, (b)
commercial paper rated "A-1" or better according to S & P or "P-1" or better
according to Moody's and maturing not more than one hundred and eighty (180)
days from the date of acquisition thereof, (c) time deposits with, and
certificates of deposit and bankers' acceptances issued by, any Agent or any
United States bank having capital surplus and undivided profits aggregating at
least $1,000,000,000, and (d) mutual funds whose investments are limited to the
foregoing.
"CHANGE IN CONTROL" means the occurrence of any one of the following:
(a) any Person or group of related Persons shall have acquired beneficial
ownership of more than thirty-five percent (35%) of the outstanding Stock of the
Trust (within the meaning of SECTION 13(D) or 14(D) of the SECURITIES EXCHANGE
ACT OF 1934, as amended, and the applicable rules and regulations thereunder);
(b) Continuing Directors of the Trust shall cease to constitute at least
sixty-six and two-thirds percent (66-2/3%) of the members of the Board of
Directors of the Trust; (c) the Trust shall cease to own, directly or
indirectly, all of the outstanding Stock of General Partner; or (d) the Trust
shall cease to own, directly or indirectly, at least fifty-one percent (51%) of
the outstanding Stock of the Partnership.
"CLOSING DATE" means the date this Agreement is fully executed and
delivered.
"CO-AGENTS" is defined in the preamble.
"CODE" means the INTERNAL REVENUE CODE OF 1986, as amended, and the
rules and regulations promulgated thereunder.
5
"COMMITMENT" means, for a Lender, the amount (which is subject to
reduction and cancellation as provided in this Agreement) stated beside such
Lender's name on SCHEDULE 1 as most recently amended under this Agreement, as
the same may be terminated pursuant to SECTION 11.1, and as the same may be
increased or decreased from time to time by further assignment pursuant to
SECTION 13.11.
"COMMITMENT USAGE" means, at any time, the SUM of (a) the Total
Principal Debt PLUS (b) the LC Exposure.
"COMPANIES" means, without duplication, (a) the Trust, (b) the
Partnership; (c) General Partner; and (d) each of their respective Consolidated
Affiliates, and "COMPANY" means any one of the Companies.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form
of EXHIBIT B and signed by a Responsible Officer of Borrowers.
"CONSOLIDATED AFFILIATE" means, in respect of any Person, any other
Person in whom such Person holds Stock and whose financial results would be
consolidated under GAAP with the financial results of such Person on the
consolidated financial statements of such Person.
"CONTINUING DIRECTORS" means the directors of the Trust on the Closing
Date and each other director if such director's nomination for the election to
the Board of Directors of the Trust is recommended by a majority of the
Continuing Directors (which shall include Persons theretofore elected as
directors as contemplated by this definition).
"CONSTITUENT DOCUMENTS" means, with respect to any Person, its articles
or certificate of incorporation, bylaws, partnership agreements, organizational
documents, limited liability company agreements, trust agreement, or such other
document as may govern such Person's formation, organization, and management.
"CONTINUE", "CONTINUATION", and "CONTINUED" refers to the continuation
pursuant to SECTION 3.10 hereof of a Eurodollar Borrowing from one Interest
Period to the next Interest Period.
"CONVERT," "CONVERSION," and "CONVERTED" shall refer to a conversion
pursuant to SECTION 3.10 of one Type of Borrowing into another Type of
Borrowing.
"CREDIT PARTIES" means Agents, Lenders, and Issuing Bank, and "CREDIT
PARTY" means any one of the Credit Parties.
"CURRENT FINANCIALS" means, at any time, the consolidated Financial
Statements of the Companies most recently delivered to Administrative Agent
under SECTION 7.1(A) or 7.1(B), as the case may be.
"DEBT SERVICE" means, for any Person for any period, THE SUM OF (a) all
regularly scheduled principal payments (but excluding any balloon payments) and
(b) all Interest Expense, in each case that is paid or payable during such
period in respect of all Liabilities of such Person.
"DEBTOR RELIEF LAWS" means TITLE 11 of the UNITED STATES CODE and all
other applicable state or federal liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, suspension
of payments, or similar Governmental Requirements affecting creditors' Rights in
effect from time to time.
"DEFAULT" is defined in SECTION 10.
6
"DEFAULTING LENDER" means, as of any date, any Lender that has
defaulted on any of its obligations under this Agreement, which default has not
been cured or waived as of such date.
"DEFAULT RATE" means an annual rate of interest equal from day-to-day
to THE LESSER OF (a) the Base Rate PLUS four (4%), and (b) the Maximum Rate.
"DESIGNATED NET PROCEEDS" means the Net Proceeds from any Hotel Sale by
any Company that Borrowers designate in writing to Administrative Agent are to
be used for the redemption or purchase of the Trust's or the Partnership's
Stock.
"DISTRIBUTION" means, with respect to any Stock issued by a Person, (a)
the declaration or payment of any dividend on or with respect to such Stock by
such Person, (b) any loan or advance by that Person to, or other investment by
that Person in, the holder of any of such Stock, and (c) any other payment
(other than a Redemption) by that Person with respect to such Stock.
"DOCUMENTATION AGENT" is defined in the preamble.
"EBITDA" means, for any Person for any period, THE SUM OF (a) Net
Income, PLUS (b) depreciation and amortization expense, PLUS (c) Interest
Expense, PLUS (d) income taxes deducted from Net Income in accordance with GAAP,
PLUS (e) extraordinary losses (and any unusual losses arising in or outside the
ordinary course of business of such Person not included in extraordinary losses)
determined in accordance with GAAP that have been reflected in the determination
of Net Income, MINUS (f) extraordinary gains (and any unusual gains arising in
or outside the ordinary course of business of such Person not included in
extraordinary gains) determined in accordance with GAAP that have been reflected
in the determination of Net Income, PLUS (g) any amounts attributable to
minority interests to the extent deducted in calculating Net Income.
"ELIGIBLE ASSIGNEE" means: (a) a Lender; (b) an Affiliate of a Lender;
and (c) any other Person approved by Administrative Agent and, unless a Default
exists at the time any assignment is effected in accordance with SECTION 13.11,
Borrowers, such approval by Administrative Agent and by Borrowers not to be
unreasonably withheld or delayed by Administrative Agent and Borrowers and such
approval to be deemed given by Borrowers if no objection is received by the
assigning Lender and Administrative Agent from Borrowers within two (2) Business
Days after notice of such proposed assignment has been provided by
Administrative Agent or the assigning Lender to Borrowers; PROVIDED, HOWEVER,
that no Company or any Affiliate of any Company shall qualify as an Eligible
Assignee.
"EMPLOYEE PLAN" means an employee pension benefit plan covered by TITLE
IV of ERISA and established or maintained by any Company.
"ENVIRONMENTAL LAW" means any and all Governmental Requirements
pertaining to health or the environment in effect in any and all jurisdictions
in which any Company is conducting, or where any Property of any Company is
located and which are applicable to any Company or any Property of any Company,
including, without limitation, the OIL POLLUTION ACT OF 1990, as amended,
("OPA"), the CLEAN AIR ACT, as amended, the COMPREHENSIVE ENVIRONMENTAL,
RESPONSE, COMPENSATION, AND LIABILITY ACT OF 1980, as amended, ("CERCLA"), the
FEDERAL WATER POLLUTION CONTROL ACT, as amended, the OCCUPATIONAL SAFETY AND
HEALTH ACT OF 1970, as amended, the RESOURCE CONSERVATION AND RECOVERY ACT OF
1976, as amended, ("RCRA"), the SAFE DRINKING WATER ACT, as amended, the TOXIC
SUBSTANCES CONTROL Act, as amended, the SUPERFUND AMENDMENTS AND REAUTHORIZATION
ACT OF 1986, as amended, the HAZARDOUS MATERIALS TRANSPORTATION ACT, as amended,
and other environmental conservation or protection Governmental Requirements.
The term "OIL" has the meaning specified in OPA, the terms "HAZARDOUS SUBSTANCE"
and
7
"RELEASE" (or "THREATENED RELEASE") have the meanings specified in CERCLA, and
the terms "SOLID WASTE" and "DISPOSAL" (or "DISPOSED") have the meanings
specified in RCRA; PROVIDED, HOWEVER, that (i) in the event either OPA, CERCLA
or RCRA is amended so as to broaden the meaning of any term defined thereby,
such broader meaning shall apply subsequent to the effective date of such
amendment, and (ii) to the extent the Governmental Requirements of the state in
which any property of any Company is located establish a meaning for "OIL,"
"HAZARDOUS SUBSTANCE," "RELEASE," "SOLID WASTE" or "DISPOSAL" which is broader
than that specified in either OPA, CERCLA or RCRA, such broader meaning shall
apply.
"EQUITY ISSUANCE" means the issuance or sale by any Company of any
Stock, or the exercise of any options, warrants, or other rights to subscribe
for or otherwise acquire Stock, of such Company.
"ERISA" means the EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, as
amended, and the rules and regulations promulgated thereunder.
"EURODOLLAR RATE" means, for any Eurodollar Borrowing for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Dow ▇▇▇▇▇ Markets Page 3750 (or any successor
page) as the London interbank offered rate (LIBOR) for deposits in Dollars at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the first
(1st) day of such Interest Period for a term comparable to such Interest Period.
If for any reason such rate is not available, then the term "EURODOLLAR RATE"
shall mean, for any Eurodollar Borrowing for any Interest Period therefor, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first (1st) day of such Interest Period for a term comparable
to such Interest Period; PROVIDED, HOWEVER, if more than one rate is specified
on Reuters Screen LIBO Page, then the applicable rate shall be the arithmetic
mean of all such rates (rounded upwards, if necessary, to the nearest 1/100 of
1%). If neither of such rates is available, then the term "EURODOLLAR RATE"
shall mean, for any Eurodollar Borrowing for any Interest Period therefor, the
rate at which deposits in United States dollars are offered by Administrative
Agent at approximately 11:00 a.m. (London, England time) on the day that is two
(2) Business Days preceding the first (1st) day of such Interest Period to prime
banks in the London interbank market and for a period equal to such Interest
Period commencing on the first (1st) day of such Interest Period and in an
amount equal to Administrative Agent's Pro Rata Share of such Eurodollar
Borrowing.
"EURODOLLAR BORROWING" means a Borrowing bearing interest at THE SUM OF
the Adjusted Eurodollar Rate PLUS the Applicable Margin.
"EXISTING AGREEMENT"is defined in the recitals.
"FEDERAL FUNDS RATE" means, on any day, the annual rate (rounded
upwards, if necessary, to the nearest 0.01%) determined by Administrative Agent
(which determination is conclusive and binding, absent manifest error) to be
equal to the weighted average of the rates on overnight federal funds
transactions with member banks of the Federal Reserve System arranged by federal
funds brokers as published by the Federal Reserve Bank of New York on the next
successive Business Day; PROVIDED, HOWEVER, that (a) if such determination date
is not a Business Day, then the Federal Funds Rate for such day shall be the
rate for such transactions on the next preceding Business Day as published on
the next successive Business Day, or (b) if those rates are not published for
any Business Day, then the Federal Funds Rate shall be the average of the
quotations at approximately 10:00 a.m. on such Business Day received by
Administrative Agent from three (3) federal funds brokers of recognized standing
selected by Administrative Agent in its sole discretion.
"FINANCIAL STATEMENTS" means, for any Person, balance sheets and
statements of earnings, shareholders' equity, and cash flow prepared (a)
according to GAAP, (b) except as stated in SECTION 1.4, in
8
comparative form to prior year-end figures or corresponding periods of the
preceding fiscal year, as applicable, and (c) on a consolidated basis if that
Person had any Consolidated Affiliates during the applicable period.
"FIXED CHARGES" means, for any Person for any period, THE SUM OF (a)
all Debt Service during such period, (b) all Distributions paid or payable
during such period in respect of any preferred Stock of such Person, and (c) a
Capital Expenditure reserve equal to THE GREATER OF (i) four percent (4%) of
Gross Room Revenue for such period with respect to all Properties owned by such
Person, and (ii) any reserves required under all Operating Leases of such Person
during such period.
"FUNDING LOSS" has the meaning set forth in SECTION 3.18.
"FUNDS FROM OPERATIONS" means, for any Person for any period, net
income PLUS depreciation and amortization, all as determined in accordance with
GAAP; PROVIDED THAT there shall not be included in such calculation (a) any
proceeds of any insurance policy, (b) any gain or loss which is classified as
"EXTRAORDINARY" in accordance with GAAP, (c) any capital gains, or (d) net
earnings of Unconsolidated Affiliates to the extent such earnings are not
distributable to such Person after the request of such Person.
"GAAP" means generally accepted accounting principles of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board that are applicable on the date of this
Agreement, subject to changes permitted by SECTION 1.4.
"GENERAL PARTNER" means Innkeepers Financial Corporation, a Virginia
corporation.
"GOVERNMENTAL AUTHORITY" means, with respect to any Person, property,
or business, any (a) local, state, or federal judicial, executive, or
legislative instrumentality, (b) private arbitration board or panel acting
through binding arbitration or mediation, or (c) central bank having
jurisdiction over such Person, property, or business.
"GOVERNMENTAL REQUIREMENT" means all applicable statutes, laws,
treaties, ordinances, rules, regulations, orders, writs, injunctions, decrees,
judgments, opinions, and interpretations of any Governmental Authority.
"GROSS ROOM REVENUE" means, with respect to any Hotel for any period,
all revenues from all Rooms in such Hotel during such period.
"HAZARDOUS SUBSTANCE" means any substance (a) the presence of which
requires removal, remediation, or investigation under any Environmental Law, or
(b) that is defined or classified as a hazardous waste, hazardous material,
pollutant, contaminant, or toxic or hazardous substance under any Environmental
Law.
"HOTEL" means any Property operated as a hotel, inn, or otherwise
having Rooms.
"HOTEL SALE" means the sale or disposition of a Hotel or any interest
in a Hotel.
"IHI LESSEES" means the Lessees listed on SCHEDULE 2.1, and "IHI
LESSEE" means any one of the IHI Lessees.
"IMPLIED DEBT SERVICE" means, as of any date, the annual Debt Service
required to amortize the outstanding Commitment Usage as of such date assuming
equal monthly payments of principal and interest
9
over a period of twenty (20) years at an annual rate of interest equal to THE
GREATER OF (a) two and one-quarter of one percent (2.25%) in excess of the
most-recent rate published on such date in the UNITED STATES FEDERAL RESERVE
STATISTICAL RELEASE (H.15) for 7-year Treasury Constant Maturities, and (b) nine
percent (9%).
"IMPLIED VALUE" means, with respect to any Hotel or Borrowing Base
Property as of any determination date, (a) Adjusted NOI from such Hotel or
Borrowing Base Property for the twelve (12) month period ending on the date of
determination, DIVIDED BY (b) the Capitalization Rate as of such date.
"INDEBTEDNESS" means, for any Person, all Liabilities of such Person,
excluding accounts payable and accrued expenses in each case incurred in the
ordinary course of business and the payment of which is not past-due (unless
payment is being contested in good faith by appropriate proceedings diligently
conducted and for which reserves in accordance with GAAP or otherwise reasonably
acceptable to Administrative Agent have been provided).
"INTEREST EXPENSE" means, for any Person for any period, all of such
Person's paid, accrued, or amortized interest expense on such Person's
Indebtedness (whether direct, indirect, or contingent, and including interest on
all convertible Indebtedness).
"INTEREST PERIOD" has the meaning set forth in SECTION 3.9.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, or other similar
agreement or arrangement designed to protect any Person against fluctuations in
interest rates.
"INVESTMENT GRADE RATING" means that (a) if both the ▇▇▇▇▇'▇ Rating and
the S & P Rating are in effect, then both (i) the ▇▇▇▇▇'▇ Rating equals Baa3 or
better, AND (ii) the S & P Rating equals BBB- or better, or (b) if only one of
the ▇▇▇▇▇'▇ Rating or the S & P Rating shall be in effect, then (i) either the
▇▇▇▇▇'▇ Rating equals Baa3 or better OR the S & P Rating equals BBB- or better,
and (ii) such rating is supported by the corresponding rating of Duff & ▇▇▇▇▇▇
Credit Rating Co., Fitch Investors Service, L.P., or any successor thereof or
another rating agency acceptable to Administrative Agent.
"ISSUING BANK" is defined in the preamble.
"LC" means a documentary or standby letter of credit issued for the
account of any Borrower by Issuing Bank under this Agreement and under an LC
Agreement.
"LC AGREEMENT" means a letter of credit application and agreement (in
form and substance satisfactory to Issuing Bank) executed by Borrowers and
submitted to Issuing Bank for an LC for the account of such Borrowers.
"LC EXPOSURE" means, without duplication, the SUM of (a) the total face
amount of all undrawn and uncancelled LCs PLUS (b) the total unpaid
reimbursement obligations of Borrowers under drawings under any LC.
"LC REQUEST" means a request substantially in the form of EXHIBIT C
executed by a Responsible Officer of Borrowers.
"LC SUB-FACILITY" means a sub-facility of the Commitments for the
issuance of LCs, as described in SECTION 2.3, under which the LC Exposure (a)
may never collectively exceed $20,000,000, and (b) TOGETHER WITH the Total
Principal Debt may never exceed the Total Commitment.
10
"LENDERS" is defined in the preamble.
"LESSEES" means each lessee of any Hotel pursuant to an Operating
Lease, and "LESSEE" means any one of the Lessees.
"LIABILITIES" means (without duplication), for any Person, (a) any
indebtedness, liabilities, or obligations required by GAAP to be classified upon
such Person's balance sheet as liabilities, (b) any liabilities secured (or for
which the holder of the Liability has an existing Right, contingent or
otherwise, to be so secured) by any Lien existing on Property owned or acquired
by that Person, (c) any obligations that have been (or under GAAP should be)
capitalized for financial reporting purposes, including all Capital Leases, (d)
any guaranties, endorsements, and other contingent obligations with respect to
the principal of the Liabilities or obligations of others, and (e) THE GREATER
OF (i) such Person's Share of any Liabilities of Unconsolidated Affiliates, and
(ii) the amount of any Liabilities of Unconsolidated Affiliates in which the
holder of such Liabilities has recourse against such Person for repayment, and
"LIABILITY" means any of the Liabilities. "LIABILITIES" shall not include any
amounts attributable to minority interests disclosed in the consolidated
Financial Statements of the Companies.
"LIEN" means any lien, mortgage, security interest, pledge, assignment,
charge, title retention agreement, or encumbrance of any kind and any other
substantially similar arrangement for a creditor's claim to be satisfied from
assets or proceeds prior to the claims of other creditors or the owners.
"LITIGATION" means any action by or before any Governmental Authority.
"LOAN DOCUMENTS" means (a) this Agreement, certificates, and reports
delivered under this Agreement, and exhibits and schedules to this Agreement,
(b) the Notes, (c) the Subsidiary Guaranty, (d) any Interest Rate Agreements
with any Lender specifically relating to the Obligation, (e) all other
agreements, documents, and instruments executed by Borrowers or any Company in
favor of any of the Credit Parties (or any Agent on behalf of the Credit
Parties) ever delivered in connection with or under this Agreement, (f) all LCs
and LC Agreements, and (g) all renewals, extensions, and restatements of, and
amendments and supplements to, any of the foregoing.
"MARKETABLE SECURITIES" means Stock that is (a) regularly traded on a
nationally recognized United States public exchange or market acceptable to
Administrative Agent on which securities, debt instruments, and/or mutual funds
are regularly traded, and (b) not subject to any federal or state securities
laws or other laws which restrict or limit its sale or transfer.
"MATERIAL ADVERSE EVENT" means any circumstance or event that,
individually or collectively with other circumstances or events, reasonably is
expected to result in any (a) material impairment of the ability of any Borrower
to perform any of its respective payment or other obligations under any Loan
Document, (b) material impairment of the ability of any Credit Party to enforce
(i) any of the obligations of any Borrower under this Agreement or the other
Loan Documents, or (ii) any of their respective Rights under the Loan Documents,
or (c) material and adverse effect on the financial condition of the Companies,
taken as a whole, or any Borrower.
"MATURITY DATE" means May 10, 2003, as such date may be extended
pursuant to SECTION 3.21.
"MATERIAL ENVIRONMENTAL EVENT" means, with respect to any Borrowing
Base Property, (a) a violation of any Environmental Law with respect to such
Borrowing Base Property, or (b) the presence of any Hazardous Substance on,
about, or under such Borrowing Base Property that, under or pursuant to any
11
Environmental Law, would require remediation, if in the case of either (A) or
(B), such event or circumstance could result in a material adverse affect on the
value or operations of such Borrowing Base Property.
"MAXIMUM AMOUNT" and "MAXIMUM RATE" respectively mean, for any Agent or
any Lender, the maximum non-usurious amount and the maximum non-usurious rate of
interest that, under applicable Governmental Requirement, such Agent or Lender
is permitted to contract for, charge, take, reserve, or receive on the
Obligation.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc., or, if Moody's no
longer publishes ratings, then another ratings agency acceptable to
Administrative Agent.
"▇▇▇▇▇'▇ RATING" means the most recently-announced actual or implied
rating from time to time of Moody's assigned to any class of long-term senior,
unsecured debt securities issued by the Trust, as to which no letter of credit,
guaranty, or third party credit support is in place, regardless of whether all
or any part of such Indebtedness has been issued at the time such rating was
issued.
"MULTI-EMPLOYER PLAN" means a multi-employer plan as defined in
SECTIONS 3(37) or 4001(A)(3) of ERISA or SECTION 414(F) of the Code to which any
Borrower or any of its Consolidated Affiliates (or any Person that, for purposes
of TITLE IV of ERISA, is a member of any Borrower's controlled group or is under
common control with any Borrower within the meaning of SECTION 414 of the Code)
is making, or has made, or is accruing, or has accrued, an obligation to make
contributions.
"NET INCOME" means, for any Person for any period, the net earnings (or
loss) after taxes of such Person determined in accordance with GAAP.
"NET PROCEEDS" means, with respect to any Equity Issuance or Hotel Sale
by any Company, the amount of cash received by such Company in connection with
such transaction after deducting therefrom the aggregate, without duplication,
of the following amounts to the extent properly attributable to such
transaction: (a) reasonable brokerage commissions, attorneys' fees, finder's
fees, financial advisory fees, accounting fees, underwriting fees, investment
banking fees, and other similar commissions and fees (and expenses and
disbursements of any of the foregoing), in each case, to the extent paid by such
Company; (b) printing and related expenses and filing, recording, or
registration fees or charges or similar fees or charges paid by such Company;
(c) taxes paid or payable by such Company to any Governmental Authority as a
result of such transaction; (d) in the case of a Hotel Sale, THE GREATER OF (i)
the amount of Indebtedness secured by a Lien in the applicable Hotel repaid out
of the cash received by such Company, and (ii) an amount equal to fifty percent
(50%) of the greater of (A) the Implied Value of the applicable Hotel (or the
applicable interest therein), (B) the appraised value of the applicable Hotel
(or the applicable interest therein) pursuant to an appraisal acceptable to
Administrative Agent, and (C) the gross sales price of the applicable Hotel; and
(e) in the case of a Hotel Sale, any escrowed funds and any reserves for
indemnification and environmental obligations.
"NOTES" means one of the promissory notes substantially in the form of
EXHIBIT D, and "NOTE" means any one of the Notes.
"OBLIGATION" means all present and future indebtedness and obligations,
and all renewals, increases, and extensions thereof, or any part thereof, now or
hereafter owed to any Credit Party by any Borrower under any Loan Document,
together with all interest accruing thereon, fees, costs, and expenses
(including all reasonable attorneys' fees and expenses incurred in the
enforcement or collection thereof) payable under the Loan Documents or in
connection with the protection of Rights under the Loan Documents.
12
"OBLIGORS" means Borrowers and Subsidiary Guarantors, and "OBLIGOR"
means any one of the Obligors.
"OPERATING LEASE" means, with respect to any Hotel owned or ground
leased by a Company, the lease agreement executed by such Company and the Lessee
of such Hotel.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereof, established under ERISA.
"PERMITTED DISTRIBUTIONS" means: (a) for the Trust in any fiscal year
of the Trust, THE GREATER OF (i) THE LESSER OF (A) an amount not to exceed
ninety percent (90%) of the Trust's Funds from Operations for the immediately
preceding fiscal year, and (B) an amount not to exceed the Trust's Cash
Available for Distribution for the immediately preceding fiscal year, and (ii)
the amount of Distributions required to be paid during such fiscal year in order
for the Trust to qualify as a REIT; and (b) for the Partnership in any fiscal
year of the Partnership, the amount of Distributions required to be paid during
such fiscal year in order for the Trust to qualify as a REIT.
"PERMITTED LIENS" means:
(a) Liens, if any, granted to Administrative Agent, for the ratable
benefit of the Credit Parties, to secure the Obligation;
(b) pledges or deposits made to secure payment of worker's compensation
(or to participate in any fund in connection with worker's compensation
insurance), unemployment insurance, pensions, or social security programs;
(c) encumbrances consisting of zoning restrictions, easements, or other
restrictions on the use of real Property, PROVIDED THAT such items do not
materially impair the use of such Property for the purposes intended and none of
which is violated in any material respect by existing or proposed structures or
land use;
(d) Liens imposed by mandatory provisions of any Governmental
Requirement such as for materialmen's, mechanic's, warehousemen's, and other
like Liens arising in the ordinary course of business, securing payment of any
Liability whose payment is not yet due or that is being contested in good faith
by appropriate proceedings diligently conducted, and for which reserves in
accordance with GAAP or other security (and otherwise reasonably acceptable to
Administrative Agent) have been provided;
(e) Liens for taxes, assessments, and governmental charges or
assessments that are not yet due and payable or that are being contested in good
faith by appropriate proceedings diligently conducted, and for which reserves in
accordance with GAAP or other security (and otherwise reasonably acceptable to
Administrative Agent) have been provided; and
(f) Liens securing assessments or charges payable to a Property owner
association or similar entity, which assessments are not yet due and payable or
that are being contested in good faith by appropriate proceedings diligently
conducted, and for which reserves in accordance with GAAP or other security (and
otherwise reasonably acceptable to Administrative Agent) have been provided.
"PERMITTED REDEMPTIONS" means the Redemption by the Trust of its Stock
and the Redemption by the Partnership of its Stock for aggregate cash in an
amount not to exceed in any calendar year THE LESSER OF (a) ninety percent (90%)
of Adjusted FFO, and (b) one hundred percent (100%) of Adjusted CAD.
13
"PERSON means any individual, trust, corporation, partnership, limited
liability company, joint venture, unincorporated organization, or other similar
entity, or any Governmental Authority.
"POTENTIAL DEFAULT" means the occurrence of any event or the existence
of any circumstance that could, upon notice or lapse of time or both, become a
Default.
"PRINCIPAL DEBT" means, for a Lender and at any time, the unpaid
principal balance of all outstanding Borrowings from such Lender hereunder as of
such date.
"PROPERTY" means assets and properties, whether real, personal, or
mixed, tangible or intangible.
"PRO RATA" and "PRO RATA SHARE" means, when determined for any Lender,
the proportion (stated as a percentage) that (a) such Lender's Commitment, or,
if the Total Commitments shall have been terminated, then of the sum of (without
duplication) (i) the Principal Debt of such Lender's Note PLUS (ii) the LC
Exposure of such Lender, bears to (b) the Total Commitment, or, if the Total
Commitments have been terminated, then of the sum of (without duplication) (i)
the Total Principal Debt of the Notes PLUS (ii) the LC Exposure of all Lenders.
"QUALIFIED PROPERTY" has the meaning set forth in SECTION 4.2(B).
"REDEMPTION" means, with respect to any Stock issued by a Person, the
retirement, redemption, purchase, or other acquisition for value of such Stock
by such Person.
"REGULATION D" means REGULATION D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REIT" means a "REAL ESTATE INVESTMENT TRUST" for purposes of the Code.
"REPRESENTATIVES" means representatives, officers, directors,
employees, attorneys, and agents.
"REQUIRED LENDERS" means, as of any date, any combination of Lenders
(other than Defaulting Lenders) who collectively hold sixty-six and two-thirds
percent (66-2/3%) or more of the Total Commitments (excluding the Commitments of
Defaulting Lenders), or if the Total Commitments have been terminated, then of
the sum of (without duplication) (a) the Total Principal Debt of the Notes
(other than of any Defaulting Lenders) PLUS (b) the LC Exposure of all Lenders
(other than of any Defaulting Lenders).
"RESERVE REQUIREMENT" means, with respect to any Eurodollar Borrowing
for the relevant Interest Period, the actual aggregate reserve requirements
(including all basic, supplemental, emergency, special, marginal, and other
reserves required by applicable Governmental Requirement) applicable to a member
bank of the Federal Reserve System for eurocurrency fundings or liabilities.
"RESPONSIBLE OFFICER" means, for any Person, any chairman, president,
chief executive officer, chief financial officer, controller, secretary,
executive vice president, or senior vice president of such Person.
"RIGHTS" means rights, remedies, powers, privileges, and benefits.
"ROOMS" means rooms or suites in service in an existing and operating
extended stay, full service, or limited service hotel.
14
"SECURED DEBT" means, for any Person, Indebtedness of such Person
secured by Liens (other than Permitted Liens) in any of such Person's Properties
or other assets.
"SHARE" means, for any Person, such Person's share of the assets,
liabilities, revenues, income, losses, or expenses of an Unconsolidated
Affiliate based upon such Person's percentage ownership of the Stock of such
Unconsolidated Affiliate.
"SOLVENT" means, as to a Person, that (a) the aggregate fair market
value of its assets exceeds its Liabilities, and (b) such Person is able to pay
and is paying its Liabilities as they mature.
"S & P" means Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., a New York corporation, or if S & P no longer publishes ratings,
then another ratings agency acceptable to Administrative Agent.
"S & P RATING" means the most recently-announced actual or implied
rating from time to time of S & P assigned to any class of long-term senior,
unsecured debt securities issued by the Trust, as to which no letter of credit,
guaranty, or third party credit support is in place, regardless of whether all
or any part of such Indebtedness has been issued at the time such rating was
issued.
"STOCK" means all shares, options, warrants, general or limited
partnership interests, membership interests, or other ownership interests
(regardless of how designated) of or in a corporation, partnership, limited
liability company, trust, or other entity, whether voting or nonvoting,
including common stock, preferred stock, or any other "EQUITY SECURITY" (as such
term is defined in RULE 3A11-1 of the GENERAL RULES AND REGULATIONS promulgated
by the Securities and Exchange Commission under the SECURITIES EXCHANGE ACT OF
1934, as amended).
"SUBSIDIARY GUARANTORS" has the meaning set forth in SECTION 4.2(B),
and "SUBSIDIARY GUARANTOR" means any one of the Subsidiary Guarantors.
"SUBSIDIARY GUARANTY" means the Unconditional Guaranty of Payment dated
of even date herewith, executed by each of the Subsidiary Guarantors in favor of
the Credit Parties, and substantially in the form of EXHIBIT E.
"SUMMERFIELD LESSEES" means the Lessees listed on SCHEDULE 2.2, and
"SUMMERFIELD LESSEE" means any one of the Summerfield Lessees.
"SYNDICATION AGENT" is defined in the preamble.
"TANGIBLE NET WORTH" means, as of any date, (a) Total Assets, MINUS (b)
all Liabilities of the Companies, on a consolidated basis, as of such date.
"TAXES" means, for any Person, taxes, assessments, or other
governmental charges or levies imposed upon it, its income, or any of its
properties, franchises, or assets.
"TERMINATION DATE" means THE EARLIER OF (a) the Maturity Date, AND (b)
the effective date that Lenders' commitments to lend hereunder are otherwise
canceled or terminated in accordance with this Agreement.
"TOTAL ASSETS" means, for the Companies, on a consolidated basis, as of
any date, all assets of such Person determined in accordance with GAAP.
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"TOTAL COMMITMENT" means, at any time, THE SUM OF the Commitments of
all Lenders.
"TOTAL INDEBTEDNESS TO IMPLIED VALUE RATIO" means, as of any date, the
ratio of (a) all Indebtedness of the Companies, on a consolidated basis, as of
such date, to (b) THE SUM OF (i) the Implied Value of all Hotels owned by the
Companies and that have been in service for more than twelve (12) months as of
the determination date, PLUS (ii) the Approved Costs of all Hotels owned by the
Companies and that have been in service for less than twelve (12) months as of
the determination date, PLUS (iii) the Approved Costs of all Hotels under
construction to the extent financed with Advances under this Agreement, PLUS
(iv) THE SUM OF the Companies' investments in all cash, Cash Equivalents, and
Marketable Securities.
"TOTAL PRINCIPAL DEBT" means, at any time, THE SUM OF the Principal
Debt of all Lenders.
"TYPE" means any type of Borrowing determined with respect to the
applicable interest option.
"UNCONSOLIDATED AFFILIATE" means, in respect of any Person, any other
Person in whom such Person holds Stock and whose financial results would not be
consolidated under GAAP with the financial results of such Person on the
consolidated financial statements of such Person.
"UNENCUMBERED HOTELS" means, as of any date, all Hotels in which a
Borrower or any Subsidiary Guarantor owns fee simple title or leasehold
interests, in each case free and clear of any Liens (other than Permitted
Liens), and "UNENCUMBERED HOTEL" means any one of the Unencumbered Hotels.
"UNSECURED DEBT" means, for any Person, Indebtedness of such Person
that is not Secured Debt.
"UNSECURED DEBT TO UNENCUMBERED IMPLIED VALUE RATIO" means, as of any
date, THE RATIO OF (a) THE SUM OF (i) the Total Commitment, PLUS (ii) all
Unsecured Debt (other than the Total Principal Debt) of the Companies, on a
consolidated basis, as of such date, to (b) THE SUM OF (i) the Implied Value of
all Unencumbered Hotels that have been in service for more than twelve (12)
months as of the determination date, PLUS (ii) the Approved Costs of all
Unencumbered Hotels that have been in service for less than twelve (12) months
as of the determination date, PLUS (iii) the Approved Costs of all Unencumbered
Hotels under construction to the extent financed with Advances under this
Agreement, PLUS (iv) the SUM of the Companies' investments in all cash, Cash
Equivalents, and Marketable Securities that are not subject to any Lien (other
than Permitted Liens).
1.2 TIME REFERENCES. Unless otherwise specified in the Loan Documents
(a) time references are to time in Dallas, Texas, and (b) in calculating a
period from one date to another, the word "FROM" means "FROM AND INCLUDING" and
the word "TO" or "UNTIL" means "TO BUT EXCLUDING."
1.3 OTHER REFERENCES. Unless otherwise specified in the Loan Documents
(a) where appropriate, the singular includes the plural and vice versa, and
words of any gender include each other gender, (b) headings and caption
references may not be construed in interpreting provisions, (c) monetary
references are to currency of the United States of America, (d) section,
paragraph, annex, schedule, exhibit, and similar references are to the
particular Loan Document in which they are used, (e) references to "TELECOPY,"
"FACSIMILE," "FAX," or similar terms are to facsimile or telecopy transmissions,
(f) references to "INCLUDING" mean including without limiting the generality of
any description preceding that word, (g) the rule of construction that
references to general items that follow references to specific items are limited
to the same type or character of those specific items is not applicable in the
Loan Documents, (h) references to any Person include that Person's heirs,
personal representatives, successors, trustees, receivers, and permitted
assigns, (i) references to any Governmental Requirement include every amendment
or supplement to it, rule and regulation adopted under it, and successor or
replacement for it, and (j) references to any Loan Document or
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other document include every renewal and extension of it, amendment and
supplement to it, and replacement or substitution for it.
1.4 ACCOUNTING PRINCIPLES. Under the Loan Documents, unless otherwise
stated, (a) GAAP determines all accounting and financial terms and compliance
with financial covenants, (b) GAAP in effect on the date of this Agreement
determines compliance with financial covenants, (c) otherwise, all accounting
principles applied in a current period must be comparable (except for changes in
accounting principles adequately disclosed and in conformity with GAAP) in all
material respects to those applied during the preceding comparable period, and
(d) all accounting and financial terms and compliance with financial covenants
must be for the Companies, on a consolidated basis, as applicable. If there is a
change in GAAP after the date hereof, then each Compliance Certificate shall
include calculations setting forth the adjustments from the relevant financial
items as shown in the Current Financials, based on the then-current GAAP, to the
corresponding financial items based on GAAP as used in the Current Financials
delivered to Administrative Agent on or prior to the date hereof, so as to
demonstrate how such financial covenant compliance was derived from the Current
Financials.
1.5 JOINT AND SEVERAL.
(a) All representations contained herein shall be deemed individually
made by each Borrower, and each of the covenants, agreements, and obligations
set forth herein shall be deemed to be the joint and separate covenants,
agreements, and obligations of each Borrower. Any notice, request, consent,
report, or other information or agreement delivered to any Credit Party by any
Borrower shall be deemed to be ratified by, consented to, and also delivered by
the other Borrowers. Each Borrower recognizes and agrees that each covenant and
agreement of a "BORROWER" and "BORROWERS" in this Agreement and in any other
Loan Document shall create a joint and several obligation of such entities,
which may be enforced against such entities jointly, or against each entity
separately.
(b) Each Borrower hereby irrevocably and unconditionally agrees: (i)
that it is jointly and severally liable to the Credit Parties for the full and
prompt payment of the Obligation and the performance by each Borrower of its
obligations hereunder in accordance with the terms hereof; (ii) to fully and
promptly perform all of its obligations hereunder with respect to the
Obligation; and (iii) as a primary obligation to indemnify each Credit Party on
demand for and against any loss (excluding losses arising out of the gross
negligence or willful misconduct of any Credit Party) incurred by such Credit
Party as a result of any of the obligations of any one or more of Borrowers
being or becoming void, voidable, unenforceable, or ineffective for any reason
whatsoever, whether or not known to any Credit Party or any Person, the amount
of such loss (excluding losses arising out of the gross negligence or willful
misconduct of any Credit Party) being the amount which the Credit Parties would
otherwise have been entitled to recover from any one or more Borrowers.
SECTION 2
COMMITMENT
2.1 REVOLVING FACILITY. Subject to the provisions in the Loan
Documents, each Lender severally and not jointly agrees to lend to Borrowers
such Lender's Pro Rata Share of one or more Borrowings hereunder which Borrowers
may borrow, repay, and reborrow under this Agreement, subject to the following
conditions:
(a) each Borrowing requested by Borrowers hereunder must occur on a
Business Day and no later than the Business Day immediately preceding the
Termination Date;
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(b) each Borrowing requested by Borrowers must be in an amount not less
than $1,000,000 or a greater multiple of $100,000;
(c) the Commitment Usage may not exceed THE LESSER OF (i) the Borrowing
Base, and (ii) the Total Commitment; and
(d) THE SUM OF (i) each Lender's Principal Debt PLUS (ii) such Lender's
Pro Rata Share of the LC Exposure may not exceed such Lender's Commitment.
2.2 BORROWING PROCEDURE. The following procedures apply to Borrowings:
(a) Borrowers may request a Borrowing by submitting to Administrative
Agent a Borrowing Request; PROVIDED, HOWEVER, that Borrowers may not request
more than three (3) Borrowings (other than a Continuation or Conversion of an
existing Borrowing) in any calendar month. The Borrowing Request must be
received by Administrative Agent no later than 11:00 a.m. on (i) the third (3rd)
Business Day preceding the Borrowing Date for any Eurodollar Borrowing, or (ii)
the Business Day preceding the Borrowing Date for any Base Rate Borrowing.
Administrative Agent shall promptly notify each Lender of its receipt of any
Borrowing Request and its contents. A Borrowing Request is irrevocable and
binding on Borrowers.
(b) By 11:00 a.m. on the applicable Borrowing Date, each Lender shall
remit its Pro Rata Share of each requested Borrowing by wire transfer to
Administrative Agent pursuant to Administrative Agent's wire transfer
instructions on SCHEDULE 1 (or as otherwise directed by Administrative Agent) in
funds that are available for immediate use by Administrative Agent. Subject to
receipt of such funds, Administrative Agent shall make such funds available to
Borrowers in Dallas, Texas at 2:00 p.m. on such Borrowing Date (unless it has
actual knowledge that any applicable condition precedent has not been satisfied
by Borrowers).
(c) Absent contrary written notice from a Lender, Administrative Agent
may assume that each Lender has made its Pro Rata Share of the requested
Borrowing available to Administrative Agent on the applicable Borrowing Date,
and Administrative Agent may, in reliance upon such assumption (but is not
required to), make available to Borrowers a corresponding amount. If a Lender
fails to make its Pro Rata Share of any requested Borrowing available to
Administrative Agent on the applicable Borrowing Date, then Administrative Agent
may recover the applicable amount on demand (i) from such Lender, together with
interest at the Federal Funds Rate for the period commencing on the date the
amount was made available to Borrowers by Administrative Agent and ending on
(but excluding) the date Administrative Agent recovers the amount from such
Lender, or (ii) if such Lender fails to pay its amount upon Administrative
Agent's demand, then from Borrowers, together with interest at an annual
interest rate equal to the rate applicable to the requested Borrowing for the
period commencing on the Borrowing Date and ending on (but excluding) the date
Administrative Agent recovers the amount from Borrowers. No Lender is
responsible for the failure of any other Lender to make its Pro Rata Share of
any Borrowing.
2.3 LETTERS OF CREDIT.
(a) CONDITIONS. Subject to the terms and conditions of this Agreement,
Issuing Bank agrees, if requested by Borrowers, to issue LCs upon Borrowers'
making or delivering an LC Request and delivering an LC Agreement, both of which
must be received by Administrative Agent and Issuing Bank no later than the
third (3rd) Business Day before the Business Day on which the requested LC is to
be issued, PROVIDED THAT (i) no LC may expire after a date that is one (1) month
before the Maturity Date, (ii) the LC Exposure may not exceed the limitations in
the definition of LC Sub-facility, (iii) each LC must expire no later than one
(1) year following its issuance, (iv) the limitations in SECTIONS 2.1(C) and (D)
may not be exceeded, and (v) each LC must be in the minimum amount of $50,000.
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(b) PARTICIPATION. Immediately upon Issuing Bank's issuance of any LC,
Issuing Bank shall be deemed to have sold and transferred to each other Lender,
and each other Lender shall be deemed irrevocably and unconditionally to have
purchased and received from Issuing Bank, without recourse or warranty, an
undivided interest and participation to the extent of such Lender's Pro Rata
Share in the LC and all applicable Rights of Issuing Bank in the LC -- OTHER
THAN Rights to receive certain fees provided in SECTION 3.20(D) to be for
Issuing Bank's sole account.
(c) REIMBURSEMENT OBLIGATION. To induce Issuing Bank to issue and
maintain LCs, and to induce Lenders to participate in issued LCs, Borrowers
agree, jointly and severally, to pay or reimburse Issuing Bank (i) on the second
(2nd) Business Day after Issuing Bank notifies Administrative Agent and
Borrowers that Issuing Bank has made payment under a LC, the amount paid by
Issuing Bank, and (ii) within five (5) Business Days after demand, the amount of
any additional fees Issuing Bank customarily charges for amending LCs
Agreements, for honoring drafts under LCs, and for taking similar action in
connection with letters of credit. If Borrowers have not reimbursed Issuing Bank
for any drafts paid by the date on which reimbursement is required under this
SECTION, then Administrative Agent is irrevocably authorized to fund Borrowers'
reimbursement obligations as a Base Rate Borrowing if the conditions in this
Agreement for such a Borrowing (OTHER THAN any notice requirements or minimum
funding amounts) have, to Administrative Agent's knowledge, been satisfied.
Borrower shall have the right to Convert such Base Rate Borrowing to a
Eurodollar Borrowing pursuant to the terms and conditions set forth in SECTION
3.10. The proceeds of that Borrowing shall be advanced directly to Issuing Bank
to pay Borrowers' unpaid reimbursement obligations. If funds cannot be advanced
as a result of Borrowers' failure to satisfy any condition precedent set forth
in SECTION 5, then Borrowers' reimbursement obligation shall constitute a demand
obligation. Borrowers' obligations under this SECTION are absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim, or defense to payment that any Borrower may have at any time
against Issuing Bank or any other Person. From the date that Issuing Bank pays a
draft under a LC that is not repaid with a Borrowing as described above until
Borrowers either reimburse or are obligated to reimburse Issuing Bank for that
draft under this SECTION, the amount of that draft bears interest payable to
Issuing Bank at the rate then applicable to Base Rate Borrowings. From the
demand date of the respective amounts due under this SECTION, to the date paid
(including any payment from proceeds of a Base Rate Borrowing), unpaid
reimbursement amounts accrue interest that is payable on demand at the Default
Rate.
(d) GENERAL. Issuing Bank shall promptly notify Administrative Agent
and Borrowers of the date and amount of any draft presented for honor under any
LC (but failure to give notice will not affect Borrowers' obligations under this
Agreement). Issuing Bank shall pay the requested amount upon presentment of a
draft unless presentment on its face does not comply with the terms of the
applicable LC. Borrowers' reimbursement obligations to Issuing Bank and Lenders,
and each Lender's obligations to Issuing Bank, under this SECTION are absolute
and unconditional irrespective of, and Issuing Bank is not responsible for, (i)
the validity, enforceability, sufficiency, accuracy, or genuineness of documents
or endorsements (even if they are in any respect invalid, unenforceable,
insufficient, inaccurate, fraudulent, or forged), (ii) any dispute by any
Company with or any Company's claims, setoffs, defenses, counterclaims, or other
Rights against any Credit Party or any other Person, or (iii) the occurrence of
any Potential Default or Default. However, nothing in this Agreement constitutes
a waiver of Borrowers' Rights to assert any claim or defense based upon the
gross negligence or willful misconduct of any Credit Party. Issuing Bank shall
promptly pay to Administrative Agent for Administrative Agent to promptly
distribute reimbursement payments received from any Borrower to all Lenders
according to their Pro Rata Share.
(e) OBLIGATION OF LENDERS. If Borrowers fail to reimburse Issuing Bank
as provided in SECTION 2.3(C) by the date on which reimbursement is due under
that SECTION, and funds cannot be advanced under SECTION 2.1 to satisfy the
reimbursement obligations, then Administrative Agent shall promptly notify each
Lender of Borrowers' failure, of the date and amount paid, and of each Lender's
Pro Rata Share of the
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unreimbursed amount. Each Lender shall promptly and unconditionally make
available to Administrative Agent, for the account of Issuing Bank, in
immediately available funds its Pro Rata Share of the unpaid reimbursement
obligation, subject to the limitations of SECTION 2.1(D). Funds are due and
payable to Administrative Agent before the close of business on the Business Day
when Administrative Agent gives notice to each Lender of Borrowers'
reimbursement failure (if notice is given before 1:00 p.m.) or on the next
succeeding Business Day (if notice is given after 1:00 p.m.). All amounts
payable by any Lender accrue interest after the due date at the Federal Funds
Rate from the day the applicable draft or draw is paid by Administrative Agent
to (but not including) the date the amount is paid by such Lender to
Administrative Agent. Upon receipt of any such funds, Administrative Agent shall
make them available to Issuing Bank.
(f) DUTIES OF ISSUING BANK. Each Credit Party and each Borrower agree
that, in paying any draft under any LC, Issuing Bank has no responsibility to
obtain any document (OTHER THAN any documents expressly required by the
respective LC) or to ascertain or inquire as to any document's validity,
enforceability, sufficiency, accuracy, or genuineness or the authority of any
Person delivering it. Neither Issuing Bank nor its Representatives will be
liable to any Credit Party or any Company for any LC's use or for any
beneficiary's acts or omissions (INCLUDING, WITHOUT LIMITATION, ANY ACTS OR
OMISSIONS CONSTITUTING ORDINARY NEGLIGENCE). Any action, inaction, error, delay,
or omission taken or suffered by Issuing Bank or any of its Representatives in
connection with any LC, applicable drafts or documents, or the transmission,
dispatch, or delivery of any related message or advice, if in good faith and in
conformity with applicable Governmental Requirements and in accordance with the
standards of care specified in the UNIFORM CUSTOMS AND PRACTICES FOR DOCUMENTARY
CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NO. 500
(as amended or modified), is binding upon the Companies and the Credit Parties
and, except as provided in SECTION 2.3(E), does not place Issuing Bank or any of
its Representatives under any resulting liability to any Company or any Credit
Party. Issuing Bank is not liable to any Company or any Credit Party for any
action taken or omitted, in the absence of gross negligence or willful
misconduct, by Issuing Bank or its Representative in connection with any LC.
(g) CASH COLLATERAL. On the Termination Date and if requested by
Required Lenders while a Default exists, Borrowers shall provide Administrative
Agent, for the ratable benefit of Issuing Bank and Lenders, cash collateral in
an amount to equal the then-existing LC Exposure.
(h) INDEMNIFICATION. EACH BORROWER SHALL PROTECT, INDEMNIFY, PAY, AND
SAVE EACH CREDIT PARTY, AND THEIR RESPECTIVE REPRESENTATIVES, HARMLESS FROM AND
AGAINST ANY AND ALL CLAIMS, DEMANDS, LIABILITIES, DAMAGES, COSTS, CHARGES, AND
EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) WHICH ANY OF THEM MAY INCUR OR
BE SUBJECT TO AS A CONSEQUENCE OF THE ISSUANCE OF ANY LC, ANY DISPUTE ABOUT IT,
OR THE FAILURE OF ISSUING BANK TO HONOR A DRAW REQUEST UNDER ANY LC AS A RESULT
OF ANY ACT OR OMISSION (WHETHER RIGHT OR WRONG) OF ANY PRESENT OR FUTURE
GOVERNMENTAL AUTHORITY. ALTHOUGH EACH CREDIT PARTY, AND THEIR RESPECTIVE
REPRESENTATIVES, HAVE THE RIGHT TO BE INDEMNIFIED UNDER THIS AGREEMENT FOR ITS
OR THEIR OWN ORDINARY NEGLIGENCE, NO PERSON IS ENTITLED TO INDEMNITY UNDER THE
FOREGOING FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
(i) LC AGREEMENTS. Although referenced in any LC, terms of any
particular agreement or other obligation to the beneficiary are not incorporated
into this Agreement in any manner. The fees and other amounts payable with
respect to each LC are as provided in this Agreement, drafts under each LC are
part of the Obligation, only the events specified in this Agreement as a Default
shall constitute a default under any LC or LC Agreement, and the terms of this
Agreement control any conflict between the terms of this Agreement and any LC
Agreement.
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2.4 COMPETITIVE BID FACILITY. If the Trust achieves an Investment Grade
Rating, then Lenders agree that, upon the written request of Borrowers to
Administrative Agent, Borrowers and the Credit Parties shall enter into
negotiations to amend this Agreement to provide for an uncommitted competitive
advance facility pursuant to which Borrowers may obtain competitive advances
from Lenders through an auction mechanism. The competitive advance facility
shall include terms, conditions, and fees acceptable to Borrowers and the Credit
Parties.
SECTION 3
TERMS OF PAYMENT
3.1 NOTES AND PAYMENTS.
(a) The Total Principal Debt shall be evidenced by the Notes, which
Notes shall be payable by each Borrower, jointly and severally, to Lenders in
the aggregate stated principal amount of the Total Commitment, or so much
thereof as shall be outstanding at maturity.
(b) Borrowers must make each payment and prepayment on the Obligation,
without offset, counterclaim, or deduction, to Administrative Agent's principal
office in Dallas, Texas, in Dollars that will be available for immediate use by
Administrative Agent by 2:00 p.m. on the day due. Payments received after such
time shall be deemed received on the next Business Day. Administrative Agent
shall pay to each Lender any payment to which such Lender is entitled on the
same day Administrative Agent receives the funds from Borrowers if
Administrative Agent receives the payment or prepayment before 2:00 p.m., and
otherwise before 2:00 p.m. on the following Business Day. If and to the extent
that Administrative Agent does not make payments to any Lender when due, then
Administrative Agent shall be obligated to pay to such Lender such unpaid
amounts together with interest at the Federal Funds Rate from the due date until
(but not including) the payment date.
3.2 INTEREST AND PRINCIPAL PAYMENTS.
(a) INTEREST PAYMENTS.
(i) Subject to SECTION 13.2, accrued interest on each Base
Rate Borrowing is due and payable on the last day of each calendar
month during the term of this Agreement, commencing on May 30, 2000,
and on the Termination Date; PROVIDED, HOWEVER, that interest with
respect to any Base Rate Borrowing shall also be due and payable on the
Conversion date of any such Borrowing to a Eurodollar Borrowing.
(ii) Subject to SECTION 13.2, accrued interest on each
Eurodollar Borrowing shall be due and payable as it accrues on the last
day of its respective Interest Period; provided that if any Interest
Period is greater than three (3) months, then accrued interest shall
also be due and payable on the date that is three (3) months after the
commencement of such Interest Period.
(b) PRINCIPAL PAYMENTS. The Total Principal Debt is due and payable on
the Termination Date.
(c) VOLUNTARY PREPAYMENT. Borrowers may voluntarily repay or prepay all
or any part of the Total Principal Debt at any time without premium or penalty,
subject to the following conditions:
(i) Administrative Agent must receive Borrowers' written
payment notice by 11:00 a.m. at least three (3) Business Days preceding
the date of payment of any Borrowing, which shall specify
21
the payment date and the Type and amount of the Borrowing(s) to be
paid, and which shall constitute an irrevocable and binding obligation
of Borrowers to make a repayment or prepayment on the designated date;
(ii) each partial repayment or prepayment must be in a minimum
amount of at least $500,000 and be an integral multiple of $100,000,
or, if such repayment or prepayment is less than $500,000, then equal
to the Total Principal Debt PLUS all accrued interest thereon; and
(iii) Borrowers shall pay any related Funding Loss upon
demand.
3.3 INTEREST OPTIONS. Except as specifically otherwise provided,
Borrowings shall bear interest at an annual rate equal to THE LESSER OF (a) the
Base Rate PLUS the Applicable Margin, or the Adjusted Eurodollar Rate PLUS the
Applicable Margin (in each case as designated or deemed designated by Borrowers
and, in the case of Eurodollar Borrowings, for the Interest Period designated by
Borrowers), and (b) the Maximum Rate. Each change in the Base Rate and Maximum
Rate is effective, without notice to Borrowers or any other Person, upon the
effective date of change.
3.4 QUOTATION OF RATES. A Representative of Borrowers may call
Administrative Agent before delivering a Borrowing Request to receive an
indication of the interest rates then in effect, but the indicated rates do not
bind Administrative Agent or Lenders or affect the interest rate that is
actually in effect when Borrowers deliver its Borrowing Request or on the
Borrowing Date.
3.5 DEFAULT RATE. If permitted by applicable law, all past-due
Principal Debt (at its stated maturity or upon acceleration) and past-due
interest accruing on any of the foregoing, shall bear interest from the date of
any Default at the Default Rate until paid, regardless of whether payment is
made before or after entry of a judgment.
3.6 INTEREST RECAPTURE. If the designated interest rate applicable to
any Borrowing exceeds the Maximum Rate, then the interest rate on that Borrowing
is limited to the Maximum Rate, PROVIDED THAT any subsequent reductions in the
designated rate shall not reduce the interest rate thereon below the Maximum
Rate until the total amount of accrued interest equals the amount of interest
that would have accrued if that designated rate had always been in effect. If at
maturity (stated or by acceleration), or at final payment of the Notes, the
total interest paid or accrued is less than the interest that would have accrued
if the designated rates had always been in effect, then, at that time and to the
extent permitted by applicable law, Borrowers shall pay an amount equal to the
difference between (a) the lesser of the amount of interest that would have
accrued if the designated rates had always been in effect and the amount of
interest that would have accrued if the Maximum Rate had always been in effect,
and (b) the amount of interest actually paid or accrued on the Notes.
3.7 INTEREST CALCULATIONS.
(a) Interest shall be calculated on the basis of actual number of days
elapsed (including the first day but excluding the last day) but computed as if
each calendar year consisted of 360 days for all Borrowings (unless the
calculation would result in an interest rate greater than the Maximum Rate, in
which event interest shall be calculated on the basis of actual days elapsed and
a year of 365 or 366 days, as the case may be). All interest rate determinations
and calculations by Administrative Agent are conclusive and binding absent
manifest error.
(b) The provisions of this Agreement relating to calculation of the
Base Rate and the Adjusted Eurodollar Rate are included only for the purpose of
determining the rate of interest or other amounts to be
22
paid under this Agreement that are based upon those rates. Each Lender may fund
and maintain its funding of all or any part of each Borrowing as it selects.
3.8 MAXIMUM RATE. Regardless of any provision contained in any Loan
Document or any document related thereto, it is the intent of the parties to
this Agreement that no Credit Party may contract for, charge, take, reserve,
receive or apply, as interest on all or any part of the Obligation any amount in
excess of the Maximum Rate or the Maximum Amount or receive any unearned
interest in violation of any applicable law, and, if any Credit Party ever does
so, then any excess shall be treated as a partial repayment or prepayment of
principal and any remaining excess shall be refunded to Borrowers. In
determining if the interest paid or payable exceeds the Maximum Rate, Borrowers
and the Credit Parties shall, to the maximum extent permitted under applicable
law, (a) treat all Borrowings as but a single extension of credit (and the
Credit Parties and Borrowers agree that is the case and that provision in this
Agreement for multiple Borrowings is for convenience only), (b) characterize any
non-principal payment as an expense, fee, or premium rather than as interest,
(c) exclude voluntary repayments or prepayments and their effects, and (d)
amortize, prorate, allocate, and spread the total amount of interest throughout
the entire contemplated term of the Obligation. If, however, the Obligation is
paid in full before the end of its full contemplated term, and if the interest
received for its actual period of existence exceeds the Maximum Amount, then the
Credit Parties shall refund any excess (and the Credit Parties may not, to the
extent permitted by applicable law, be subject to any penalties provided by any
Governmental Requirements for contracting for, charging, taking, reserving or
receiving interest in excess of the Maximum Amount).
3.9 INTEREST PERIODS. When Borrowers request any Eurodollar Borrowing,
Borrowers may elect the applicable interest period (each an "INTEREST PERIOD"),
which may be, at Borrowers' option, seven (7) days (but only if available from
all Lenders), one (1) month or two (2), three (3), or six (6) months, subject to
the following conditions: (a) the initial Interest Period for a Eurodollar
Borrowing commences on the applicable Borrowing Date or Conversion date, and
each subsequent Interest Period applicable to any Borrowing commences on the day
when the next preceding applicable Interest Period expires; (b) if any Interest
Period for a Eurodollar Borrowing begins on a day for which there exists no
numerically corresponding Business Day in the calendar month at the end of the
Interest Period ("ENDING CALENDAR MONTH"), then the Interest Period ends on the
next succeeding Business Day of the Ending Calendar Month, unless there is no
succeeding Business Day in the Ending Calendar Month in which case the Interest
Period ends on the next preceding Business Day of the Ending Calendar Month; (c)
no Interest Period for any portion of Total Principal Debt may extend beyond the
scheduled repayment date for that portion of Principal Debt; and (d) there may
not be in effect at any one time more than eight (8) Interest Periods.
3.10 CONTINUATIONS; CONVERSIONS. Borrowers may (a) on the last day of
the applicable Interest Period Convert all or part of a Eurodollar Borrowing to
a Base Rate Borrowing, (b) at any time Convert all or part of a Base Rate
Borrowing to a Eurodollar Borrowing, and (c) on the last day of an Interest
Period, Continue a Eurodollar Borrowing for a new Interest Period. Any such
Conversion or Continuation is subject to the dollar limits and denominations of
SECTION 2.1 and may be accomplished by delivering a Borrowing Request to
Administrative Agent no later than 11:00 a.m. on the third (3rd) Business Day
before (i) the Conversion date for Conversion to a Eurodollar Borrowing, (ii)
the last day of the Interest Period, for the Continuation to a new Interest
Period, and (iii) the last day of the Interest Period for Conversion to a Base
Rate Borrowing. Absent such a Borrowing Notice, a Eurodollar Borrowing shall be
Continued as a Eurodollar Borrowing having a one (1) month Interest Period (so
long as no Default exists and/or the last day of such Interest Period does not
extend beyond the Maturity Date, in either such case such Eurodollar Borrowing
shall be Converted to a Base Rate Borrowing) when the applicable Interest Period
expires.
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3.11 ORDER OF APPLICATION.
(a) NO DEFAULT. If no Default exists, then except as otherwise
specifically provided in the Loan Documents, any payment shall be applied to the
Obligation in the order and manner as Borrowers direct.
(b) DEFAULT. If a Default exists, any payment (including proceeds from
the exercise of any Rights) shall be applied in the following order: (i) to all
fees and expenses for which any Credit Party have not been paid or reimbursed in
accordance with the Loan Documents (and if such payment is less than all unpaid
or unreimbursed fees and expenses, then the payment shall be paid against unpaid
and unreimbursed fees and expenses in the order of incurrence or due date); (ii)
to accrued interest on the Principal Debt; (iii) to the Total Principal Debt and
the remaining Obligation in the order and manner as the Required Lenders deem
appropriate; and (iv) as a deposit with Administrative Agent, for the benefit of
the Credit Parties, as security for and payment of any LC Exposure.
(c) PRO RATA. Each payment or prepayment shall be distributed to each
Lender in accordance with its Pro Rata Share of such payment or prepayment.
3.12 RIGHT OF SETOFF; ADJUSTMENTS.
(a) SETOFF. Upon the occurrence and during the continuance of any
Default, each Lender (and each of its Affiliates) is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender (or any of its Affiliates) to or for the credit or the account of any
Borrower against any and all of the obligations of any Borrower now or hereafter
existing under this Agreement and the Note held by such Lender, irrespective of
whether such Lender shall have made any demand under this Agreement or such Note
and although such obligations may be unmatured. Each Lender agrees promptly to
notify Borrowers after any such setoff and application made by such Lender;
PROVIDED, HOWEVER, that the failure to give such notice shall not affect the
validity of such setoff and application. The Rights of each Lender under this
SECTION are in addition to other Rights (including, without limitation, other
Rights of setoff) that such Lender may have.
(b) ADJUSTMENTS. If any Lender (a "BENEFITTED LENDER") shall at any
time receive any payment of all or part of the Principal Debt owing to it, or
interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by setoff, or otherwise), in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of such other Lender's Principal Debt owing to it, or interest thereon,
such Benefitted Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender's Principal
Debt owing to it, or shall provide such other Lenders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause such
Benefitted Lender to share the excess payment or benefits of such collateral or
proceeds ratably with all Lenders; PROVIDED, HOWEVER, that if all or any portion
of such excess payment or benefits is thereafter recovered from such Benefitted
Lender, then such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.
Borrowers agree that any Lender so purchasing a participation from a Lender
pursuant to this SECTION may, to the fullest extent permitted by law, exercise
all of its Rights of payment (including the Right of setoff) with respect to
such participation as fully as if such Person were the direct creditor of
Borrowers in the amount of such participation.
3.13 BOOKING BORROWINGS. To the extent permitted by applicable law, any
Lender may make, carry, or transfer its Borrowings at, to, or for the account of
any of its branch offices or the office of any of its Affiliates. However, no
Affiliate is entitled to receive any greater payment under SECTION 3.14 than the
transfer or Lender would have been entitled to receive with respect to those
Borrowings, and a transfer may
24
not be made if, as a direct result of it, SECTION 3.14 or 3.15 would apply to
any of the Obligation. If any of the conditions of SECTIONS 3.14, 3.15, or 3.16
ever apply to a Lender, then such Lender shall, to the extent possible, carry or
transfer its Borrowings at, to, or for the account of any of its branch offices
or the office or branch of any of its Affiliates so long as the transfer is
consistent with the other provisions of this SECTION, does not create any burden
or adverse circumstance for such Lender that would not otherwise exist, and
eliminates or ameliorates the conditions of SECTIONS 3.14, 3.15, or 3.16 as
applicable.
3.14 INCREASED COST AND REDUCED RETURN.
(a) CHANGE IN LAWS. If, after the date hereof, the adoption of any
applicable Governmental Requirement, or any change in any applicable
Governmental Requirement, or any change in the interpretation or administration
thereof by any Governmental Authority charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such Governmental Authority:
(i) shall subject such Lender (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any
Eurodollar Borrowing, its Note, or its obligation to make Eurodollar
Borrowings, or change the basis of taxation of any amounts payable to
such Lender (or its Applicable Lending Office) under this Agreement or
its Note in respect of any Eurodollar Borrowings (other than taxes
imposed on the overall net income of such Lender by the jurisdiction in
which such Lender has its principal office or such Applicable Lending
Office);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Reserve Requirement utilized in the determination of the Adjusted
Eurodollar Rate) relating to any extensions of credit or other assets
of, or any deposits with or other liabilities or commitments of, such
Lender (or its Applicable Lending Office), including the Commitment of
such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending
Office) or the London interbank market any other condition affecting
this Agreement or its Note or any of such extensions of credit or
liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurodollar Borrowings or to reduce any sum received or
receivable by such Lender (or its Applicable Lending Office) under this
Agreement or its Note with respect to any Eurodollar Borrowings, then Borrowers
shall pay to such Lender on demand such amount or amounts as will compensate
such Lender for such increased cost or reduction.
(b) CAPITAL ADEQUACY. If, after the date hereof, any Lender shall have
determined that the adoption of any applicable Governmental Requirement
regarding capital adequacy or any change therein or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
Governmental Authority, has or would have the effect of reducing the rate of
return on the capital of such Lender or any corporation controlling such Lender
as a consequence of such Lender's obligations hereunder to a level below that
which such Lender or such corporation could have achieved but for such adoption,
change, request, or directive (taking into consideration its policies with
respect to capital adequacy), then from time to time upon demand Borrowers shall
pay to such Lender such additional amount or amounts as will compensate such
Lender for such reduction.
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(c) NOTICE. Each Lender shall promptly notify Borrowers and
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Lender to compensation pursuant to this
SECTION 3.14 and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of such Lender, be otherwise disadvantageous to
it. Any Lender claiming compensation under this SECTION 3.14 shall furnish to
Borrowers and Administrative Agent a statement setting forth the additional
amount or amounts to be paid to it hereunder which shall be conclusive in the
absence of manifest error. In determining such amount, such Lender may use any
reasonable averaging and attribution methods.
(d) SUSPENSION OF EURODOLLAR BORROWINGS. If any Lender requests
compensation by Borrowers under this SECTION 3.14, then Borrowers may, by notice
to such Lender (with a copy to Administrative Agent), suspend the obligation of
such Lender to make or Continue Eurodollar Borrowings, or Convert all Eurodollar
Borrowings into Base Rate Borrowings, until the event or condition giving rise
to such request ceases to be in effect (in which case the provisions of SECTION
3.17 shall be applicable); provided that such suspension shall not affect the
Right of such Lender to receive the compensation so requested.
3.15 LIMITATION ON TYPES OF BORROWINGS. If on or prior to the first
(1st) day of any Interest Period for any Eurodollar Borrowing:
(a) Administrative Agent is unable to determine the Eurodollar Rate for
such Interest Period in accordance with the definition of "EURODOLLAR RATE;" or
(b) the Required Lenders determine (which determination shall be
conclusive) and notify Administrative Agent that the Adjusted Eurodollar Rate
will not adequately and fairly reflect the cost to Lenders of funding Eurodollar
Borrowings for such Interest Period;
then Administrative Agent shall give Borrowers prompt notice thereof specifying
the relevant amounts or periods, and so long as such condition remains in
effect, Lenders shall be under no obligation to make additional Eurodollar
Borrowings, Continue any Eurodollar Borrowings, or to Convert any Base Rate
Borrowings to Eurodollar Borrowings and Borrowers shall, on the last day(s) of
the then-current Interest Period(s) for the outstanding Eurodollar Borrowings,
either prepay such Borrowings or Convert such Borrowings into Base Rate
Borrowings in accordance with the terms of this Agreement.
3.16 ILLEGALITY. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Lender or its Applicable Lending
Office to make, maintain, or fund Eurodollar Borrowings hereunder, then such
Lender shall promptly notify Administrative Agent and Borrowers thereof and such
Lender's obligation to make or Continue Eurodollar Borrowings and to Convert
Base Rate Borrowings into Eurodollar Borrowings shall be suspended until such
time as such Lender may again make, maintain, and fund Eurodollar Borrowings (in
which case the provisions of SECTION 3.17 shall be applicable).
3.17 TREATMENT OF AFFECTED LOANS. If the obligation of any Lender to
make or Continue Eurodollar Borrowings or to Convert Base Rate Borrowings into
Eurodollar Borrowings shall be suspended pursuant to SECTIONS 3.14, 3.15, or
3.16, such Lender's Eurodollar Borrowings shall be automatically Converted into
Base Rate Borrowings on the last day(s) of the then current Interest Period(s)
for all Eurodollar Borrowings (or, in the case of a Conversion required by
SECTION 3.16, on such earlier date as such Lender may specify to Borrowers with
a copy to Administrative Agent) and, unless and until such Lender gives notice
as provided below that the circumstances specified in SECTIONS 3.14, 3.15, or
3.16 that gave rise to such Conversion no longer exist:
26
(a) to the extent that such Lender's Eurodollar Borrowings have been so
Converted, all payments and prepayments of principal that would otherwise be
applied to such Lender's Eurodollar Borrowings shall be applied instead to its
Base Rate Borrowings; and
(b) all Borrowings that would otherwise be made or Continued by such
Lender as Eurodollar Borrowings shall be made or Continued instead as Base Rate
Borrowings, and all Borrowings of such Lender that would otherwise be Converted
into Eurodollar Borrowings shall be Converted instead into (or shall remain as)
Base Rate Borrowings.
If such Lender gives notice to Borrowers (with a copy to Administrative Agent)
that the circumstances specified in SECTIONS 3.14, 3.15, or 3.16 that gave rise
to the Conversion of such Lender's Eurodollar Borrowings pursuant to this
SECTION 3.17 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist), such Lender's Base Rate Borrowings shall be
automatically Converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Eurodollar Borrowings, to the extent necessary so
that, after giving effect thereto, all Eurodollar Borrowings held by Lenders are
held Pro Rata (as to principal amounts, Types, and Interest Periods).
3.18 COMPENSATION. Upon the request of any Lender, Borrowers shall pay
to such Lender such amount or amounts as shall be sufficient (in the reasonable
opinion of such Lender) to compensate it for any loss, cost, or expense (herein
called a "FUNDING Loss") incurred by it as a result of:
(s) any payment, prepayment, or Conversion of a Eurodollar Borrowing
for any reason (including, without limitation, the acceleration of the
Obligation pursuant to SECTION 11.1) on a date other than the last day of the
Interest Period for such Borrowing; or
(b) any failure by Borrowers for any reason (including, without
limitation, the failure of any condition precedent specified in SECTION 5 to be
satisfied) to borrow, Convert, Continue, or prepay a Eurodollar Borrowing on the
date for such borrowing, Conversion, Continuation, or prepayment specified in
the relevant Borrowing Notice.
A Funding Loss shall include, without limitation, an amount equal to (i) the
principal amount so pre-paid, Converted on a date other than the last day of the
Interest Period for such Borrowing ("BREAKAGE DATE I"), or not borrowed,
Converted, Continued or prepaid on the date for such Borrowing, Conversion,
Continuation or prepayment specified in the relevant Borrowing Notice ("BREAKAGE
DATE II"), TIMES (ii) the number of days in the period from the date of such
prepayment, Conversion, or failure to borrow, Convert, Continue, or prepay to
the last day of the Interest Period for the Eurodollar Borrowing so prepaid or
Converted (or in the case of a failure to borrow, Convert, Continue or Prepay,
the Interest Period for such Eurodollar Borrowing which would have commenced on
the date specified for such Borrowing) (the "APPLICABLE INTEREST PERIOD")
DIVIDED BY 360, TIMES (iii) the Eurodollar Rate for the Applicable Interest
Period less the Eurodollar Rate determined as of the Breakage Date I or Breakage
Date II, as applicable. If the Eurodollar Rate for Breakage Date I or Breakage
Date II, as applicable, is higher than the Eurodollar Rate for the Applicable
Interest Period, or if the amount determined under the immediately preceding
sentence is less than $100, then no Funding Loss shall be payable.
3.19 TAXES.
(a) Any and all payments by Borrowers to or for the account of any
Lender or any Agent hereunder or under any other Loan Document shall be made
free and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, EXCLUDING, in the case of each Lender and each
Agent, taxes imposed on its income, net
27
receipts, gross income, gross receipts, and franchise taxes imposed on it, by
the jurisdiction under the laws of which such Lender (or its Applicable Lending
Office) or such Agent (as the case may be) is organized or any political
subdivision thereof (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings, and liabilities being hereinafter referred to
as "TAXES"). If Borrowers shall be required by law to deduct any Taxes from or
in respect of any sum payable under this Agreement or any other Loan Document to
any Lender or any Agent, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this SECTION 3.19) such Lender or
such Agent receives an amount equal to the sum it would have received had no
such deductions been made, (ii) Borrowers shall make such deductions, (iii)
Borrowers shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law, and (iv) Borrowers shall
furnish to Administrative Agent, at its address referred to in SECTION 13.3, the
original or a certified copy of a receipt evidencing payment thereof.
(b) In addition, Borrowers agree to pay any and all present or future
stamp or documentary taxes and any other excise or property taxes or charges or
similar levies which arise from any payment made under this Agreement or any
other Loan Document or from the execution or delivery of, or otherwise with
respect to, this Agreement or any other Loan Document (hereinafter referred to
as "OTHER TAXES").
(c) Borrowers agree to indemnify each Lender and each Agent for the
full amount of Taxes and Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this SECTION 3.19) paid by such Lender or such Agent (as the case may be) and
any liability (including penalties, interest, and expenses) arising therefrom or
with respect thereto.
(d) Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Lender listed on the signature pages hereof and on
or prior to the date on which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing by Borrowers or
any Agent (but only so long as such Lender remains lawfully able to do so),
shall provide Borrowers and Administrative Agent with (i) INTERNAL REVENUE
SERVICE FORM 1001 or 4224, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Lender is entitled to
benefits under an income tax treaty to which the United States is a party which
reduces the rate of withholding tax on payments of interest or certifying that
the income receivable pursuant to this Agreement is effectively connected with
the conduct of a trade or business in the United States, (ii) INTERNAL REVENUE
SERVICE FORM W-8 or W-9, as appropriate, or any successor form prescribed by the
Internal Revenue Service, and (iii) any other form or certificate required by
any taxing authority (including any certificate required by SECTIONS 871(H) and
881(C) of the Code), certifying that such Lender is entitled to an exemption
from or a reduced rate of tax on payments pursuant to this Agreement or any of
the other Loan Documents.
(e) For any period with respect to which a Lender has failed to provide
Borrowers and Administrative Agent with the appropriate form pursuant to SECTION
3.19(D) (unless such failure is due to a change in treaty, law, or regulation
occurring subsequent to the date on which a form originally was required to be
provided), such Lender shall not be entitled to indemnification under SECTION
3.19(A) or (B) with respect to Taxes imposed by the United States; PROVIDED,
HOWEVER, that should a Lender, which is otherwise exempt from or subject to a
reduced rate of withholding tax, become subject to Taxes because of its failure
to deliver a form required hereunder, Borrowers shall take such steps as such
Lender shall reasonably request to assist such Lender to recover such Taxes.
(f) If Borrowers are required to pay additional amounts to or for the
account of any Lender pursuant to this SECTION 3.19, then such Lender will agree
to use reasonable efforts to change the jurisdiction of its Applicable Lending
Office so as to eliminate or reduce any such additional payment which may
28
thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of Taxes,
Borrowers shall furnish to Administrative Agent the original or a certified copy
of a receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement of
Borrowers hereunder, the agreements and obligations of Borrowers contained in
this SECTION 3.19 shall survive the termination of the Total Commitments and the
payment in full of the Notes.
3.20 FEES.
(a) TREATMENT OF FEES. The fees described in this SECTION 3.20 (i) are
not compensation for the use, detention, or forbearance of money, (ii) are in
addition to, and not in lieu of, interest and expenses otherwise described in
this Agreement, (iii) are payable in accordance with SECTION 3.1(B), (iv) are
non-refundable, (v) to the fullest extent permitted by applicable law, bear
interest, if not paid when due, at the Default Rate, and (vi) are calculated on
the basis of actual number of days (including the first day but excluding the
last day) elapsed, but computed as if each calendar year consisted of 360 days,
unless computation would result in an interest rate in excess of the Maximum
Rate in which event the computation is made on the basis of actual days elapsed
and a year of 365 or 366 days, as the case may be. The fees described in this
SECTION 3.20 are in all events subject to the provisions of SECTION 3.8.
(b) AGENT FEES. Borrowers shall pay to Administrative Agent, the fees
specified in the letter agreement between Administrative Agent and Borrowers,
which fees shall be for the account of Administrative Agent and for the account
of Lenders as shall be agreed between Administrative Agent and each Lender.
(c) LENDERS' FEES. Borrowers shall pay to Administrative Agent, for the
account of each Lender, a quarterly facility fee (prorated for partial quarters)
equal to THE SUM OF the amounts obtained by multiplying the Commitment of such
Lender TIMES a per annum rate equal to one-tenth of one percent (0.10%). Such
facility fee shall accrue commencing on the Closing Date, and shall be due and
payable on the last day of each March, June, September, and December during the
term hereof, commencing on June 30, 2000, and on the Termination Date, based
upon the Commitment for such Lender for each day during the quarter ending on
such date.
(e) LC FEES. As an inducement for the issuance (including, without
limitation, the extension) of each LC, Borrowers agree to pay to Administrative
Agent:
(i) For the ratable account of each Lender, on the day the fee
is payable, an issuance fee, payable quarterly in arrears, equal to THE
GREATER OF (A) the PRODUCT of the average face amount of such LC during
each applicable quarterly period TIMES one percent (1%) per annum, and
(B) $1,000; and
(ii) For the account of Issuing Bank, payable on the date of
issuance, an issuance fee, equal to the PRODUCT of the average face
amount of such LC during each applicable quarterly period TIMES
one-quarter of one percent (.25%) per annum.
(e) EXTENSION FEES. Upon the extension of the Maturity Date, as
provided in SECTION 3.21, Borrowers agree to pay Administrative Agent, on or
before the original Maturity Date, for the ratable account of Lenders, an
extension fee equal to one-quarter of one percent (.25%) of the Total
Commitment.
29
3.21 EXTENSION OF MATURITY DATE. If no Default or Potential Default
exists, then Borrowers may request a one-year extension of the Maturity Date by
making such request in writing (an "EXTENSION REQUEST") to Administrative Agent
between one hundred and fifty (150) and ninety (90) days prior to the original
Maturity Date. The original Maturity Date shall be extended for one (1) year
only if (a) Administrative Agent and each Lender consent in writing to such
extension within thirty (30) days following the receipt of the Extension
Request, and (b) Borrowers pay to Administrative Agent, for the account of
Lenders, the extension fee set forth in SECTION 3.20(E). The failure to respond
by Administrative Agent or any Lender to an Extension Request shall be deemed to
be a denial of such consent by such Person. If Lenders having a Pro Rata Share
of at least sixty-six and two-thirds percent (662/3%) consent to such extension
(such Lenders being "CONSENTING LENDERS" and the Lenders not consenting being
"NON-CONSENTING LENDERS"), then the original Maturity Date shall be extended as
to the Consenting Lenders. In such event, Borrowers may, on or before the
original Maturity Date, effect one or more assignments from the Non-Consenting
Lenders to a new Lender or Lenders pursuant to SECTION 13.11 who shall also
consent to the extension of the Maturity Date. Any such assignment to a new
Lender or Lenders shall be subject to the payment to the assigning Lender an
amount equal to the Principal Debt owing to such assigning Lender as of the
effective date of such assignment, together with all accrued unpaid interest
thereon and any Funding Loss payable under SECTION 3.18 as a result of such
payment to the assigning Lender by the assignee Lender. Administrative Agent
agrees to exercise its reasonable best efforts to assist Borrowers in
identifying prospective assignees of the Non-Consenting Lenders' Commitments
hereunder; PROVIDED, HOWEVER, that Administrative Agent has no obligation to
ensure that any such assignees will agree to purchase assignments from the
Non-Consenting Lenders. Any Non-Consenting Lender shall, on the original
Maturity Date (or, if earlier, the effective date of any assignment to another
Lender described above), cease to be a "LENDER" for purposes of this Agreement,
PROVIDED THAT Borrowers shall continue to be obligated to such Lender under
SECTION 7.12 with respect to Indemnified Liabilities (as defined in SECTION
7.12) arising prior to such date. If Borrowers fail to effect assignments from
the Non-Consenting Lenders to a new Lender or Lenders, then Borrowers may elect
to not extend the original Maturity Date, as provided herein, by giving
Administrative Agent written notice thereof at least five (5) days prior to the
original Maturity Date. In such event, Borrowers shall not be required to pay
the extension fee set forth in SECTION 3.20(E).
3.22 OPTION TO REPLACE LENDERS. If any Lender shall make demand for
payment or reimbursement pursuant to SECTION 3.14(A) or SECTION 3.14(B) or
notifies Borrowers of the occurrence of the circumstances described in SECTION
3.15(B), then, PROVIDED THAT (a) no Default has occurred and is continuing, and
(b) the circumstances resulting in such demand for payment or reimbursement are
not applicable to all Lenders, Borrowers may terminate the Commitment of such
Lender, in whole but not in part, by either (i) (A) giving such Lender and
Administrative Agent not less than five (5) Business Days' written notice
thereof, which notice shall be irrevocable and effective only upon receipt
thereof by such Lender and Administrative Agent and shall specify the date of
such termination, and (B) paying such Lender (and there shall become due and
payable) on such date the outstanding Principal Debt of all Borrowings made by
such Lender, all interest thereon, and any other Obligation owed to such Lender
(including any amounts payable under SECTION 3.18), if any, or (ii) pursuant to
the provisions of SECTION 13.11, proposing the introduction of a replacement
Lender satisfactory to Administrative Agent, or obtaining the agreement of one
or more existing Lenders, to assume the entire amount of the Commitment of the
Lender whose Commitment is being terminated, on the effective date of such
termination. Any such assignment to a replacement Lender or an existing Lender
shall be subject to the payment to the assigning Lender an amount equal to the
Principal Debt owing to such assigning Lender as of the effective date of such
assignment, together with all accrued unpaid interest thereon and any Funding
Loss payable under SECTION 3.18 as a result of such payment to the assigning
Lender by the assignee Lender. Upon the satisfaction of all the foregoing
conditions, such Lender that is being terminated shall cease to be a "LENDER"
for purposes of this Agreement, PROVIDED THAT Borrowers shall continue to be
obligated to such Lender under SECTION 7.12 with respect to Indemnified
Liabilities (as defined in SECTION 7.12) arising prior to such termination.
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SECTION 4
BORROWING BASE
4.1 BORROWING BASE.
(a) CALCULATION OF BORROWING BASE. The "BORROWING BASE" shall, as of
the last date of each fiscal quarter during the term hereof, be equal to THE
PRODUCT OF (a) forty percent (40%), AND (b) the sum of the following: (i) the
Implied Value of each Borrowing Base Property owned by an Obligor and that has
been in service for more than twelve (12) months as of such determination date;
PLUS (ii) the Approved Costs of each Borrowing Base Property owned by an Obligor
and that have been in service for less than twelve (12) months as of such
determination date; PROVIDED THAT the number of Rooms in all Borrowing Base
Properties that have been in service for less than twelve (12) months as of such
determination date may not constitute more than twenty percent (20%) of the
total number of Rooms in all Borrowing Base Properties as of such determination
date.
(b) DETERMINATION OF THE CAPITALIZATION RATE. Administrative Agent
shall notify Borrowers within forty-five (45) days prior to any adjustment to
the Capitalization Rate for each state in which a Hotel is located based upon
market conditions for comparable properties; PROVIDED THAT the Capitalization
Rate may not be increased or decreased at any one time by more than one and
one-quarter of one percent (1.25%) annually. In determining the "CAPITALIZATION
RATE," Lenders agree to consider the operating performance of each Hotel;
PROVIDED, HOWEVER, that Lenders shall not be required to adjust the
Capitalization Rate based upon such individual Hotel performance.
4.2 ADMISSION OF QUALIFIED PROPERTIES INTO THE BORROWING BASE.
(a) REQUEST FOR ADMISSION INTO BORROWING BASE. Borrowers shall provide
Administrative Agent (with copies for each of Lenders) with a written request
for a Hotel to be admitted into the Borrowing Base. Such request shall be
accompanied by information regarding such Hotel, including, without limitation,
the following, in each case acceptable to Administrative Agent: (i) a general
description of the Hotel's location, market, and amenities; (ii) a property
description; (iii) purchase information (including any contracts of sale and
closing statements); (iv) a Phase I environmental assessment and, if requested
by Administrative Agent based upon issues identified in the Phase I assessment,
additional environmental assessments; (v) copies of title insurance and any
surveys; (vi) operating statements; (vii) engineering reports; (viii) evidence
of insurance; (ix) copies of all Operating Leases, ground leases, other leases,
management agreements, and franchise agreements; (x) a copy of the most-recent
appraisal, if available; and (xi) such other information requested by
Administrative Agent as shall be necessary in order for Administrative Agent and
Required Lenders to determine whether such Hotel is a Qualified Property.
(b) QUALIFIED PROPERTIES. In order for a Hotel to be eligible for
inclusion in the Borrowing Base (an "QUALIFIED PROPERTY"), such Hotel shall have
the following characteristics:
(i) a Borrower or a ninety-nine percent (99%)-owned
Consolidated Affiliate of the Partnership that has executed the
Subsidiary Guaranty (a "SUBSIDIARY GUARANTOR") shall have good and
indefeasible title to such Hotel, free and clear of all Liens (except
for Permitted Liens);
(ii) such Hotel is an existing and operating extended stay,
full service, or limited service Hotel located in the United States;
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(iii) all Operating Leases shall be substantially in the form
previously approved by Administrative Agent or otherwise acceptable to
Administrative Agent;
(iv) all Lessees shall be either (A) an IHI Lessee, a
Summerfield Lessee, or an Affiliate thereof, (B) a wholly-owned
Consolidated Affiliate of the Trust that is a Subsidiary Guarantor, or
(C) another Person acceptable to Required Lenders; and
(v) all ground leases, if any, with respect to such Hotel shall be
acceptable to Administrative Agent.
(c) APPROVAL OF REQUIRED LENDERS. Each Hotel shall be subject to
Required Lenders' approval for admission to the Borrowing Base after evaluation
of such Hotel's market area, location, access, and design. Administrative Agent
shall provide Borrowers with written notice of whether Required Lenders have
approved a Hotel for admission into the Borrowing Base.
(d) OTHER REQUIREMENTS RESPECTING THE BORROWING BASE. During the term
hereof, (i) once five (5) Hotels have been admitted into the Borrowing Base,
there shall always be at least five (5) Hotels admitted into the Borrowing Base,
and (ii) the principal balance of the Obligation shall not be less than $1.00,
in each case unless otherwise consented to by Required Lenders.
(e) COMPUTATION OF ADJUSTED NET OPERATING INCOME. Borrowers shall
deliver to Administrative Agent quarterly computations of Adjusted NOI with the
Borrowing Base Report required pursuant to SECTION 7.1(C). Administrative Agent
shall notify Borrowers in writing of any calculation errors or other errors in
the calculation of Adjusted NOI required by Administrative Agent pursuant to the
definition of Adjusted NOI and corresponding adjustments to the Borrowing Base
(if any). If a Hotel is admitted into the Borrowing Base prior to the last day
of any fiscal quarter during the term of this Agreement, then Administrative
Agent shall notify Borrowers and Lenders in writing of any changes to the
Borrowing Base as a result of the admission of such Hotel into the Borrowing
Base.
(f) CERTAIN EVENTS WITH RESPECT TO BORROWING BASE PROPERTIES. If (i)
any Borrowing Base Property is subject to or suffers a Material Environmental
Event, (ii) any Borrowing Base Property no longer satisfies the requirements set
forth in the definition of "QUALIFIED PROPERTY," (iii) the occurrence of any
event or circumstance that could result in the failure of the Lessee under the
Operating Lease with respect to such Borrowing Base Property to pay rental
payments under such Operating Lease or otherwise materially and adversely affect
the operation of such Borrowing Base Property, (iv) any Lessee (A) is not
Solvent, (B) fails to pay its Liabilities generally as they become due, (C)
voluntarily seeks, consents to, or acquiesces in the benefit of any Debtor
Relief Law, or (D) becomes a party to or is made the subject of any proceeding
provided for by any Debtor Relief Law, other than as a creditor or claimant
(unless, if the proceeding is involuntary, the applicable petition is dismissed
within sixty (60) days after its filing), or (v) the franchise or license
agreement with respect to any Borrowing Base Property shall be terminated or
canceled or shall expire by its terms and is not replaced with an Approved
Franchise within ninety (90) days after such termination, cancellation, or
expiration, then Required Lenders shall have the right in their sole discretion
at any time and from time to time to notify Borrowers that, effective upon the
giving of such notice, and for so long as such event or condition exists, such
Borrowing Base Property shall no longer be considered a Borrowing Base Property
for purposes of determining the Borrowing Base. If Administrative Agent delivers
a notice with respect to a Borrowing Base Property as set forth in this SECTION,
then at such time as such Borrowing Base Property is no longer subject to any of
the conditions described above, Borrowers may give Administrative Agent written
notice thereof (together with reasonably detailed evidence of the cure of such
condition in a manner reasonably acceptable to Administrative Agent) and such
Borrowing Base Property shall, effective with the delivery by Borrowers of the
next Borrowing Base Report, be considered a Borrowing Base Property
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for purposes of calculating the Borrowing Base until such time as any of the
conditions set forth above apply thereto.
(g) RELEASE OF BORROWING BASE PROPERTIES AND SUBSIDIARY GUARANTORS.
Borrowers may request that a Borrowing Base Property that has previously been
admitted into the Borrowing Base be removed from the Borrowing Base PROVIDED
THAT: (i) Borrowers shall provide Administrative Agent a written request to
remove such Borrowing Base Property from the Borrowing Base, (ii) after giving
effect to the removal of such Borrowing Base Property from the Borrowing Base,
the Borrowing Base is equal to or exceeds the Commitment Usage, and (iii) no
Potential Default or Default shall exist prior to or after giving effect to the
removal of such Borrowing Base Property from the Borrowing Base. If, as of any
date, no Hotel owned by a Subsidiary Guarantor is a Borrowing Base Property,
then Administrative Agent shall, upon the written request of Borrower, release
such Subsidiary Guarantor from the Subsidiary Guaranty pursuant to a release of
guaranty in the form attached to the Subsidiary Guaranty, UNLESS a Potential
Default or Default exists or would result from such release.
(h) CLOSING DATE BORROWING BASE PROPERTIES. As of the Closing Date, the
Hotels listed on SCHEDULE 4.2 have been admitted into the Borrowing Base and are
Borrowing Base Properties as of the Closing Date.
4.3 NEGATIVE PLEDGE AGREEMENTS. Borrowers shall not, and shall not
permit any Obligor to, enter into or permit to exist any arrangement or
agreement that directly or indirectly prohibits any Obligor from creating or
incurring any Lien (other than Permitted Liens) on any Borrowing Base Property.
4.4 BORROWING BASE COVENANTS.
(a) DEBT SERVICE COVERAGE. As of any date, Borrowers shall not permit,
as of any date of determination, the ratio of (i) Adjusted NOI for the Borrowing
Base Properties in the Borrowing Base as of such date for the twelve (12) month
period ending on the date of determination, to (ii) Implied Debt Service, to be
less than 2.25 to 1.0.
(b) EXTENDED STAY/FULL SERVICE ROOMS. As of any date, Borrowers shall
not permit the ratio of (i) all Rooms in the Borrowing Base Properties that are
extended stay or full service hotel Properties, to (ii) all Rooms in all
Borrowing Base Properties, to be less than .50 to 1.0.
(c) ROOMS IN STATES. As of any date, Borrowers shall not permit the
ratio of (i) all Rooms in the Borrowing Base Properties in any single state, to
(ii) all Rooms in all Borrowing Base Properties, to exceed .30 to 1.0.
(d) ROOMS IN A PROPERTY. As of any date, Borrowers shall not permit the
ratio of (i) all Rooms in any one Borrowing Base Property, to (ii) all Rooms in
all Borrowing Base Properties, to exceed .20 to 1.0.
(e) IMPLIED VALUE OF A PROPERTY. As of any date, Borrowers shall not
permit the ratio of (i) the Implied Value of any one Borrowing Base Property, to
(ii) the Borrowing Base, to exceed .20 to 1.0.
(f) OPERATING LEASE PAYMENTS. The operations of each Borrowing Base
Property must produce cash flow sufficient to cover all minimum base rent under
the Operating Lease with respect to such Borrowing Base Property.
33
4.5 FAILURE TO COMPLY WITH BORROWING BASE COVENANTS.
(a) If, as of the last day of any fiscal quarter of Borrowers,
Borrowers shall fail to comply with SECTION 4.4(A), then Borrowers shall add one
(1) or more Borrowing Base Properties to the Borrowing Base in order to comply
with SECTION 4.4(A).
(b) If, as of the last day of any fiscal quarter of Borrowers,
Borrowers shall fail to comply with any of the covenants set forth in SECTION
4.4 (other than SECTION 4.4(A)), then Borrowers shall remove one (1) or more
Borrowing Base Properties from the Borrowing Base in order to comply with
SECTION 4.4. If after giving effect to the removal of any Borrowing Base
Properties from the Borrowing Base, the Commitment Usage exceeds the Borrowing
Base, then Borrowers shall do one or more of the following:
(A) add, pursuant to SECTION 4.2, one (1) or more additional
Borrowing Base Properties that will result in an increase in the
Borrowing Base in an amount equal to such excess, as the case may be;
or
(B) prepay the outstanding Principal Debt in an amount equal
to the excess of the Commitment Usage over the Borrowing Base; or
(C) provide collateral satisfactory in all respects to
Administrative Agent and Required Lenders to secure the excess of the
Commitment Usage over the Borrowing Base.
(c) If after giving effect to any adjustments to the Capitalization
Rate pursuant to SECTION 4.1(C), the Commitment Usage exceeds the Borrowing
Base, then Borrowers shall do one or more of the following:
(A) add, pursuant to SECTION 4.2, one (1) or more additional
Borrowing Base Properties that will result in an increase in the
Borrowing Base in an amount equal to such excess, as the case may be;
or
(B) prepay the outstanding Principal Debt in an amount equal
to the excess of the Commitment Usage over the Borrowing Base; or
(C) provide collateral satisfactory in all respects to
Administrative Agent and Required Lenders to secure the excess of the
Commitment Usage over the Borrowing Base.
(d) From the occurrence of any of the events described in SECTIONS
4.5(A), (B), or (C) (a "NON-COMPLIANCE EVENT") until the earlier of (A) the date
that Borrowers remedy such non-compliance, as described above, and (ii) ninety
(90) days after the occurrence of such Non-Compliance Event, a Potential Default
shall exist. If any such Non-Compliance Event remains unremedied after such
ninety (90) day period, then a Default shall exist.
SECTION 5
CONDITIONS PRECEDENT
5.1 CONDITIONS TO INITIAL BORROWING. The obligations of Lenders to make
the initial Borrowing and of Issuing Bank to issue the initial LC is subject to
satisfaction of the following conditions precedent on or before the Closing
Date:
(a) TRUST DOCUMENTS. The Trust shall deliver or cause to be delivered
to Administrative Agent the following, each, unless otherwise noted, dated as of
the Closing Date:
34
(i) Certified copies of its Articles of Trust, together with a
good standing certificate from the Secretary of State of the State of
Maryland and each other state in which it is qualified to do business
and a certificate or other evidence of good standing as to payment of
any applicable franchise or similar taxes from the appropriate taxing
authority of each of such states, each dated a recent date prior to the
Closing Date;
(ii) An Officer's Certificate of the Trust certifying (A) its
Constituent Documents, (B) resolutions of its trustees approving and
authorizing the execution, delivery, and performance of this Agreement
and the other Loan Documents, certified as of the Closing Date as being
in full force and effect without modification or amendment, and (C)
signatures and incumbency of its officers executing this Agreement and
the other Loan Documents;
(iii) Executed originals of this Agreement, the Notes, and the
other Loan Documents to be executed by the Trust; and
(iv) Such other documents as Administrative Agent may
reasonably request.
(b) GENERAL PARTNER AND PARTNERSHIP DOCUMENTS. The Partnership shall
deliver or cause to be delivered to Administrative Agent the following, each,
unless otherwise noted, dated as of the Closing Date:
(i) Certified copies of the Partnership's Certificate of
Limited Partnership, together with a good standing certificate from the
Partnership's jurisdiction of formation and each other state in which
it is qualified to do business, and a certificate or other evidence of
good standing as to payment of any applicable franchise or similar
taxes from the appropriate taxing authority of each of such states,
each dated a recent date prior to the Closing Date;
(ii) Certified copies of General Partner's Certificate of
Incorporation, together with a good standing certificate from General
Partner's jurisdiction of incorporation and each other state in which
it is qualified to do business, and, to the extent generally available,
a certificate or other evidence of good standing as to payment of any
applicable franchise or similar taxes from the appropriate taxing
authority of each of such states, each dated a recent date prior to the
Closing Date;
(iii) Officer's Certificate of General Partner certifying (A)
its Constituent Documents, (B) resolutions of its Board of Directors
approving and authorizing the execution, delivery, and performance of
the Loan Documents to which it is a party, certified as of the Closing
Date as being in full force and effect without modification or
amendment, (C) signatures and incumbency of its officers executing the
Loan Documents to which it is a party, and (D) the Constituent
Documents of the Partnership;
(iv) Executed originals of this Agreement, the Notes, and the
other Loan Documents to be executed by General Partner and the
Partnership; and
(v) Such other documents as Administrative Agent may
reasonably request.
(c) OPINIONS OF COUNSEL FOR BORROWERS. The Credit Parties and their
respective counsel shall have received originally executed copies of a favorable
written opinion of counsel for Borrowers, in form and substance reasonably
satisfactory to Administrative Agent and its counsel, dated as of the Closing
Date, and setting forth substantially the matters in the opinions designated in
EXHIBIT F and as to such other matters as Administrative Agent, acting on behalf
of the Credit Parties, may reasonably request.
35
(d) FEES. Borrowers shall have paid to Administrative Agent, for
distribution (as appropriate) to the Credit Parties, the fees payable on the
Closing Date referred to in SECTION 3.20.
(e) BORROWING BASE REPORT. Borrowers shall have delivered an Borrowing
Base Report dated as of December 31, 1999.
(f) COMPLETION OF PROCEEDINGS. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found acceptable by
Administrative Agent, acting on behalf of Lenders, and its counsel shall be
satisfactory in form and substance to Administrative Agent and such counsel, and
Administrative Agent and its counsel shall have received all such counterpart
originals or certified copies of such documents as Administrative Agent may
reasonably request.
(g) NO MATERIAL ADVERSE CHANGE. No Material Adverse Event has occurred
since December 31, 1999.
5.2 CONDITIONS TO ALL BORROWINGS. The obligations of Lenders on each
Borrowing Date to make all Borrowings (including the initial Borrowing) and
Issuing Bank to issue all LCs (including the initial LC) are subject to the
following conditions precedent:
(a) NOTICE OF BORROWING; LC REQUEST. Administrative Agent shall have
received, (i) in the case of a Borrowing, in accordance with the provisions of
SECTION 2.2, an originally executed Borrowing Request, and (b) in the case of an
LC, in accordance with SECTION 2.3, an LC Request.
(b) REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. The
representations and warranties in Loan Documents are true, correct, and complete
in all material respects (unless they speak to a specific date or are based on
facts which have changed by transactions expressly contemplated or permitted by
this Agreement).
(c) NO DEFAULT. No Potential Default, Default, Non-Compliance Event, or
Material Adverse Event exits or would be caused by the making of such Borrowing.
(d) NO INJUNCTION OR RESTRAINING ORDER. No order, judgment, or decree
of any Governmental Authority shall purport to enjoin or restrain any Lender
from making the Borrowing to be made by it.
(e) NO VIOLATION. The making of the Borrowing shall not violate any
Governmental Requirement, including, without limitation, REGULATION G,
REGULATION T, REGULATION U, or REGULATION X of the Board of Governors of the
Federal Reserve System.
5.3 CONDITIONS GENERALLY. Each condition precedent in this Agreement is
material to the transactions contemplated by this Agreement, and time is of the
essence with respect to each condition precedent. Lenders may fund any Borrowing
and Issuing Bank may issue any LC without all conditions being satisfied, but,
to the extent permitted by Governmental Requirements, such funding shall not be
deemed to be a waiver of the requirement that each condition precedent be
satisfied as a prerequisite for any subsequent funding or issuance, unless
Lenders specifically waive each item in writing.
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SECTION 6
REPRESENTATIONS AND WARRANTIES
Borrowers represent and warrant to the Credit Parties as follows:
6.1 PURPOSE OF CREDIT FACILITY. Borrowers shall use proceeds of the
Borrowings made and any LCs issued hereunder to acquire Qualified Properties,
for construction, development, renovation, and rehabilitation costs relating to
Qualified Properties, and for general corporate purposes (including working
capital purposes) of the Companies; PROVIDED THAT the Commitment Usage in
respect of construction and development of Qualified Properties shall not exceed
$30,000,000 at any one time outstanding. No Borrower is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any "MARGIN STOCK" within the meaning of
REGULATION U of the Board of Governors of the Federal Reserve System, as
amended. No part of the proceeds of any Borrowing or any LC shall be used,
directly or indirectly, for a purpose that violates any Governmental
Requirement, including the provisions of REGULATION U.
6.2 EXISTENCE, GOOD STANDING, AUTHORITY AND COMPLIANCE. Each Company is
duly formed, validly existing and in good standing under the Governmental
Requirements of the jurisdiction in which it is incorporated or formed as
identified on SCHEDULE 6.2 (as supplemented from time to time). Each Company (a)
is duly qualified to transact business and is in good standing as a foreign
trust, corporation, partnership, limited liability company, or other entity in
each jurisdiction where the nature and extent of its business and properties
require due qualification and good standing, which jurisdictions are identified
on SCHEDULE 6.2 (as supplemented from time to time to reflect changes as a
result of transactions permitted by the Loan Documents), (b) possesses all
requisite authority, permits, and power to conduct its business as is now being,
or is contemplated by this Agreement to be, conducted, and (c) is in compliance
with all applicable Governmental Requirements except where any such
non-compliance does not result in a Material Adverse Event.
6.3 AFFILIATES. Borrowers have no Consolidated Affiliates or
Unconsolidated Affiliates except as disclosed on SCHEDULE 6.2 (as supplemented
from time to time to reflect changes as a result of transactions permitted by
the Loan Documents).
6.4 AUTHORIZATION AND CONTRAVENTION. The execution and delivery by each
Obligor of each Loan Document or related document to which it is a party, and
the performance by it of its obligations thereunder, (a) are within its trust,
corporate, limited liability company, or partnership power, (b) have been duly
authorized by all necessary trust, corporate, limited liability company, or
partnership action of such Person, (c) require no action by or filing with any
Governmental Authority, (d) do not violate any provision of its Constituent
Documents, (e) do not violate any provision of any Governmental Requirement or
order of any Governmental Authority applicable to it, (f) do not violate any
material agreements to which it is a party, or (g) do not result in the creation
or imposition of any Lien on any asset of any Company, other than pursuant to
the Loan Documents.
6.5 BINDING EFFECT. Upon execution and delivery by all parties thereto,
each Loan Document to which it is a party shall constitute a legal and binding
obligation of each Obligor, enforceable against such Obligor in accordance with
its terms, subject to applicable Debtor Relief Laws and general principles of
equity.
37
6.6 FINANCIAL STATEMENTS; FISCAL YEAR. The Current Financials were
prepared in accordance with GAAP and present fairly, in all material respects,
the consolidated financial condition, results of operations, and cash flows of
the Companies as of, and for the portion of the fiscal year ending on the date
or dates thereof (subject only to normal audit adjustments). All material
liabilities of the Companies as of the date or dates of the Current Financials
are reflected therein or in the notes thereto. Except for transactions directly
related to, or specifically contemplated by, the Loan Documents or disclosed in
the Current Financials, no subsequent material adverse changes have occurred in
the consolidated financial condition of the Companies from that shown in the
Current Financials. The fiscal year of each Company ends on December 31.
6.7 LITIGATION. Except as disclosed on SCHEDULE 6.7, no Company is
subject to, nor is any Responsible Officer of any Company aware of the threat
of, any Litigation that, if adversely determined, could result in a Material
Adverse Event. No outstanding and unpaid final and non-appealable judgments
against any Company exist which could result in a Material Adverse Event.
6.8 TAXES.
(a) All Tax returns of each Company required to be filed have been
filed (or extensions have been granted) before delinquency, and all Taxes
imposed upon each Company that are due and payable have been paid before
delinquency or are being contested in good faith by appropriate proceedings
diligently conducted and for which reserves in accordance with GAAP or otherwise
reasonably acceptable to Administrative Agent have been provided.
(b) The members of the "AFFILIATED GROUP" (as defined in the Code) of
which any Company is a member have filed all United States Federal income tax
returns and all other material tax returns which are required to be filed by
them and have paid all taxes due pursuant to such returns or pursuant to any
assessment received by or any of them (except for taxes being contested in good
faith by appropriate proceedings diligently conducted and for which reserves in
accordance with GAAP or otherwise acceptable to Administrative Agent have been
provided). The charges, accruals, and reserves on the books of the Companies in
respect of taxes or other governmental charges are, in the opinion of the
Companies, adequate.
(c) The Trust qualifies as a REIT.
6.9 ENVIRONMENTAL MATTERS. Except as disclosed on SCHEDULE 6.9, (a) to
the best of each Borrower's knowledge, no environmental condition or
circumstance exists that materially and adversely affects any Company's
Properties or operations, (b) no Company has received any report of any
Company's violation of any Environmental Law that has not been remedied, (c) no
Company knows that any Company is under any obligation to remedy any violation
of any Environmental Law, or (d) no facility of any Company is or has been used
for storage, treatment, or disposal of any Hazardous Substance, except for the
storage and use of Hazardous Materials that are customarily stored and used by
the owners and operators of Hotels in the ordinary course of business that are
used and stored in commercially reasonable quantities and in compliance with
applicable Environmental Laws. Each Company has taken prudent steps to determine
that its Properties and operations do not violate any Environmental Law.
6.10 EMPLOYEE PLANS. Except where occurrence or existence could not
result in a Material Adverse Event, to the best of each Borrower's knowledge,
(a) no Employee Plan has incurred an "ACCUMULATED FUNDING DEFICIENCY" (as
defined in SECTION 302 of ERISA or SECTION 412 of the Code), (b) no Company has
incurred liability under ERISA to the PBGC in connection with any Employee Plan
(other than required insurance premiums, all of which have been paid), (c) no
Company has withdrawn in whole or in part from participation in a Multi-employer
Plan, (d) no Company has engaged in any "PROHIBITED
38
TRANSACTION" (as defined in SECTION 406 of ERISA or SECTION 4975 of the Code),
and (e) no "REPORTABLE EVENT" (as defined in SECTION 4043 of ERISA) has
occurred, excluding events for which the notice requirement is waived under
applicable PBGC regulations.
6.11 PROPERTIES; LIENS. To the best of each Borrower's knowledge, each
Company has good and marketable title to all of its Properties reflected in the
Current Financials (except for any Property that is obsolete or that has been
disposed in the ordinary course of business or, after the date of this
Agreement, as otherwise permitted by SECTION 8.7 or SECTION 8.8). Except for
Permitted Liens, no Lien exists on any Borrowing Base Property, and the
execution, delivery, performance, or observance of the Loan Documents shall not
require or result in the creation of any Lien on any Borrowing Base Property.
6.12 LOCATIONS. Each Company's chief executive office is located at the
address set forth on SCHEDULE 6.2 (as supplemented from time to time). Each
Company's books and records are located at its chief executive office.
6.13 GOVERNMENT REGULATIONS. No Company is subject to regulation under
the INVESTMENT COMPANY ACT OF 1940, as amended, or the PUBLIC UTILITY HOLDING
COMPANY ACT OF 1935, as amended.
6.14 TRANSACTIONS WITH AFFILIATES. Except as disclosed on SCHEDULE 6.14
(as supplemented from time to time if the disclosures are approved by
Administrative Agent), no Company is a party to a material transaction with any
of its Affiliates, other than transactions in the ordinary course of business
and upon fair and reasonable terms not materially less favorable than it could
obtain or could become entitled to in an arm's-length transaction with a Person
that was not its Affiliate.
6.15 INSURANCE. Each Company maintains with financially sound,
responsible, and reputable insurance companies or associations (or, as to
workers' compensation or similar insurance, with an insurance fund or by
self-insurance authorized by the jurisdictions in which it operates) insurance
concerning its properties and businesses against casualties and contingencies
and of types and in amounts (and with co-insurance and deductibles) as is
customary in the case of similar businesses.
6.16 LABOR MATTERS. No actual or, to the knowledge of any Responsible
Officer of any Company, threatened strikes, labor disputes, slow downs,
walkouts, or other concerted interruptions of operations by the employees of any
Company exist. All payments due from any Company for employee health and welfare
insurance have been paid or accrued as a liability on its books.
6.17 SOLVENCY. On each Borrowing Date, each Company is, and after
giving effect to the requested Borrowing will be, Solvent.
6.18 FULL DISCLOSURE. Each material fact or condition relating to the
financial condition or business of the Companies which could result in a
Material Adverse Event has been disclosed to Administrative Agent. All
information previously furnished, furnished on the date of this Agreement, and
furnished in the future, by any Company to Administrative Agent in connection
with the Loan Documents (a) was, is, and will be, true and accurate in all
material respects or based on good faith estimates on the date the information
is stated or certified, and (b) did not, does not, and will not, fail to state
any material fact the existence of which or the omission of which could result
in a Material Adverse Event
6.19 EXEMPTION FROM ERISA; PLAN ASSETS. The Trust is a "REAL ESTATE
OPERATING COMPANY" within the meaning of 29 C.F.R. ss. 2510.3-101(e) (or any
successor regulation) and the assets of the Companies would not be deemed "PLAN
ASSETS" as defined in 29 C.F.R. ss. 2510.3-101(a)(1) (or any successor
regulation) of any Employee Plan or Multi-employer Plan.
39
6.20 YEAR 2000. Except where such malfunction could not result in a
Material Adverse Event, all of the material computer software, computer
firmware, computer hardware (whether general or special purpose), and other
similar or related items of automated, computerized, and/or software systems
that are used or relied on by the Companies in the conduct of their respective
businesses have not malfunctioned, have not ceased to function, and have not
produced incorrect results when processing, providing, and/or receiving (a)
date-related data into, between, and during year 1999 through June 30, 2000, and
(b) date-related data in connection with any valid date in year 1999 through
June 30, 2000. The Companies have developed and implemented to the extent
required a year 2000 contingency and business contingency plan. Borrower
reasonably believes that all computer applications (including those of its
suppliers and vendors) that are material to each Company's business and
operations will on a timely basis be and continue to be able to perform properly
date-sensitive functions for all dates before and after January 1, 2000, except
to the extent that a failure to do so could not result in a Material Adverse
Event. The representations set forth in this SECTION 6.20 shall apply from the
Closing Date through June 30, 2000.
SECTION 7
AFFIRMATIVE COVENANTS
So long as Lenders are committed to fund any Borrowings or fund or
issue any LCs under this Agreement and until the Obligation is paid in full,
Borrowers covenant and agree as follows:
7.1 ITEMS TO BE FURNISHED. Borrowers shall cause the following to be
furnished to Administrative Agent (with sufficient copies for each Lender):
(a) ANNUAL FINANCIAL STATEMENTS. Promptly after preparation, and no
later than ninety (90) days after the last day of each fiscal year of the
Companies, consolidated Financial Statements of the Companies showing the
consolidated financial condition and results of operations of the Companies as
of, and for the year ended on, that last day, accompanied by: (A) the
unqualified opinion of the firm of an accounting firm of nationally-recognized
independent certified public accountants, based on an audit using generally
accepted auditing standards, that the Financial Statements of the Companies were
prepared in accordance with GAAP and present fairly, in all material respects,
the consolidated financial condition and results of operations of the Companies;
(B) a Compliance Certificate; and (c) a copy of the FORM 10-K filed with the
Securities and Exchange Commission for such fiscal year.
(b) PERIODIC FINANCIAL STATEMENTS. Promptly after preparation, and no
later than forty-five (45) days after the last day of each fiscal quarter of the
Companies: (i) unaudited Financial Statements of the Companies showing the
consolidated financial condition and results of operations of the Companies for
the fiscal quarter and for the period from the beginning of the current fiscal
year to the last day of the fiscal quarter; (ii) a Compliance Certificate; and
(iii) a copy of the FORM 10-Q filed with the Securities and Exchange Commission
for such fiscal quarter.
(c) BORROWING BASE REPORT. Promptly after the preparation, and no later
than forty-five (45) days after the last day of each fiscal quarter of
Borrowers, a Borrowing Base Report.
(d) OTHER REPORTS.
(i) Promptly upon its becoming available, and no later than
fifteen (15) days after the filing or receipt thereof, each
registration statement or prospectus filed by any Borrower with, or any
notification received by any Borrower in connection therewith from, any
securities exchange or the Securities and Exchange Commission, or any
successor agency thereof.
40
(ii) Promptly upon its becoming available, each report filed
by any Borrower with any securities exchange or the Securities and
Exchange Commission, or any successor agency thereof, not otherwise
required above; PROVIDED, HOWEVER that the failure to provide any such
report shall not result in a Potential Default or Default.
(iii) Promptly after the mailing or delivery thereof, copies
of all material reports or other information from any Borrower to
holders of its Stock.
(e) BORROWING BASE PROPERTY AND OTHER PROPERTY INFORMATION.
(i) Promptly after the preparation thereof, and no later than
forty-five (45) days after the last day of each fiscal quarter,
quarterly operating statements for each of the Borrowing Base
Properties.
(ii) Promptly after the preparation thereof, and no later than
forty-five (45) days after the last day of each fiscal year, annual
Capital Expenditure budgets for each of the Borrowing Base Properties
for the next fiscal year.
(iii) Promptly after the preparation thereof, and no later
than forty-five (45) days after the last day of each fiscal year,
operating statements containing a summary detailing the revenues,
expenses, net income, average daily Room rate, occupancy levels, and
revenue per available Room for each of the Hotels owned by the
Companies as of and, if applicable, for the period then ended and for
the corresponding period in the prior fiscal year.
(f) NOTICES. Notice, promptly after a Responsible Officer of any
Borrower knows of (i) the existence and status of any Litigation that, if
determined adversely to any Company, could result in a Material Adverse Event,
(ii) any change in any material fact or circumstance represented or warranted by
any Company in any Loan Document which could result in a Material Adverse Event,
(iii) the receipt by any Company of notice of any violation or alleged violation
of ERISA or any Environmental Law, or (iv) a Default or Potential Default,
specifying the nature thereof and what action Borrowers have taken, are taking,
or propose to take.
(g) CHANGE IN CONTROL. Promptly upon any Change in Control, notice of
such event together with a description of the transaction giving rise thereto.
(h) RATINGS. Promptly upon the receipt of notice thereof, and in any
event within five (5) Business Days after any change in the ▇▇▇▇▇'▇ Rating, the
S & P Rating, or any other applicable rating notice of such change.
(i) OTHER INFORMATION. Promptly upon reasonable request by
Administrative Agent, information (not otherwise required to be furnished under
the Loan Documents) respecting the business affairs, assets, and liabilities of
the Companies (including, without limitation, cash flow information, asset
business plans, market information, and tax returns) and opinions,
certifications, and documents in addition to those mentioned in this Agreement.
7.2 USE OF PROCEEDS. Borrowers shall use the proceeds of Borrowings
only for the purposes represented in this Agreement.
7.3 BOOKS AND RECORDS. Borrowers shall, and shall cause each Company
to, maintain books, records, and accounts necessary to prepare all Financial
Statements in accordance with GAAP.
41
7.4 INSPECTIONS. Upon reasonable notice and during normal business
hours, Borrowers shall, and shall cause each Company to, allow Administrative
Agent (or its Representatives) to inspect any of their respective properties
(subject to the inspection rights in any tenant leases), to review reports,
files, and other records and to make and take away copies with Borrowers'
permission, such permission not to be unreasonably withheld), and to discuss in
the presence of a Borrower or such other Company any of its affairs, conditions,
and finances with its other creditors, directors, officers, employees, or
representatives from time to time, during reasonable business hours.
7.5 TAXES. Borrowers shall, and shall cause each Company to, promptly
pay prior to delinquency any and all Taxes, other than Taxes that are being
contested in good faith by lawful proceedings diligently conducted, against
which reserves or other provisions required by GAAP have been made, and in
respect of which levy and execution of any Lien have been, and continue to be,
stayed.
7.6 PAYMENT OF OBLIGATIONS. Borrowers shall, and shall cause each
Company to, promptly pay (or renew and extend) all of their respective
obligations as they become due (unless any such obligations are being contested
in good faith by appropriate proceedings and against which reserves or other
provisions required by GAAP have been made).
7.7 EXPENSES. Borrowers shall promptly pay following demand (a) all
costs, fees, and expenses paid or incurred by Administrative Agent in connection
with the arrangement, syndication, and negotiation of the loan evidenced by this
Agreement and the other Loan Documents and the negotiation, preparation,
delivery, and execution of the Loan Documents and any related amendment, waiver,
or consent (including in each case the reasonable fees and expenses of
Administrative Agent's counsel), and (b) all reasonable costs, fees, and
expenses of Administrative Agent and, after a Default, Lenders incurred by
Administrative Agent or, after a Default, any Lender in connection with the
enforcement of the obligations of Borrowers arising under the Loan Documents or
the exercise of any Rights arising under the Loan Documents (including
reasonable attorneys' fees, expenses, and costs paid or incurred in connection
with any workout or restructure and any action taken in connection with any
Debtor Relief Laws), all of which shall be a part of the Obligation and shall
bear interest, if not paid within five (5) days following demand, at the Default
Rate until repaid. Without prejudice to the survival of any other agreement of
Borrowers hereunder, the agreements and obligations of Borrowers contained in
this SECTION shall survive the payment in full of the Total Principal Debt and
all other amounts payable under this Agreement.
7.8 MAINTENANCE OF EXISTENCE, ASSETS, AND BUSINESS. Each Company shall
(a) maintain its trust, partnership, limited liability company, or corporate
existence in good standing in its state of organization or formation, and (b)
maintain (i) its authority to transact business in good standing in all other
states, (ii) all licenses, permits, franchises, and Governmental Requirements
necessary for its business, and (iii) all of its material assets that are useful
in and necessary to its business in good working order and condition (ordinary
wear and tear excepted) and make all necessary repairs and replacements.
7.9 INSURANCE. Borrowers shall, and shall cause each Company to,
maintain with financially sound, responsible, and reputable insurance companies
or associations (or, as to workers' compensation or similar insurance, with an
insurance fund or by self-insurance authorized by the jurisdictions in which it
operates) insurance reasonably acceptable to Administrative Agent concerning its
properties and businesses against casualties and contingencies and of types and
in amounts (and with co-insurance and deductibles) as is customary in the case
of similar businesses. At Administrative Agent's request, Borrowers shall, and
shall cause each Company to, deliver to Administrative Agent evidence of
insurance for each policy of insurance and evidence of payment of all premiums.
42
7.10 PRESERVATION AND PROTECTION OF RIGHTS. Borrowers shall, and shall
cause each other Company to, perform the acts and duly authorize, execute,
acknowledge, deliver, file, and record any additional writings as Administrative
Agent may reasonably deem necessary or appropriate to preserve and protect the
Rights of the Credit Parties under any Loan Document.
7.11 ENVIRONMENTAL LAWS. Borrowers shall, and shall cause each Company
to, (a) operate and manage its businesses and otherwise conduct its affairs in
compliance with all Environmental Laws except where any such non-compliance does
not result in a Material Adverse Event, (b) promptly deliver to Administrative
Agent a copy of any written notice received from any Governmental Authority
alleging that any Company is not in compliance with any Environmental Law, and
(c) promptly deliver to Administrative Agent a copy of any written notice
received from any Governmental Authority alleging that any Company has any
potential environmental Liability.
7.12 INDEMNIFICATION.
(a) AS USED IN THIS SECTION: (I) "INDEMNITOR" MEANS BORROWERS; (II)
"INDEMNITEE" MEANS EACH CREDIT PARTY, EACH PRESENT AND FUTURE AFFILIATE OF EACH
CREDIT PARTY, EACH PRESENT AND FUTURE REPRESENTATIVE OF EACH CREDIT PARTY OR ANY
OF SUCH AFFILIATES, AND EACH PRESENT AND FUTURE SUCCESSOR AND ASSIGN OF EACH
CREDIT PARTY OR ANY OF SUCH AFFILIATES OR REPRESENTATIVES; AND (III)
"INDEMNIFIED LIABILITIES" MEANS ALL PRESENT AND FUTURE, KNOWN AND UNKNOWN, FIXED
AND CONTINGENT, ADMINISTRATIVE, INVESTIGATIVE, JUDICIAL, AND OTHER CLAIMS,
DEMANDS, ACTIONS, CAUSES OF ACTION, INVESTIGATIONS, SUITS, PROCEEDINGS, AMOUNTS
PAID IN SETTLEMENT, DAMAGES, JUDGMENTS, PENALTIES, COURT COSTS, LIABILITIES, AND
OBLIGATIONS -- AND ALL PRESENT AND FUTURE COSTS, EXPENSES, AND DISBURSEMENTS
(INCLUDING, WITHOUT LIMITATION, ALL REASONABLE ATTORNEYS' FEES AND EXPENSES
WHETHER OR NOT SUIT OR OTHER PROCEEDING EXISTS OR ANY INDEMNITEE IS PARTY TO ANY
SUIT OR OTHER PROCEEDING) IN ANY WAY RELATED TO ANY OF THE FOREGOING -- THAT MAY
AT ANY TIME BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST ANY INDEMNITEE AND
IN ANY WAY RELATING TO OR ARISING OUT OF ANY (A) LOAN DOCUMENT, TRANSACTION
CONTEMPLATED BY ANY LOAN DOCUMENT, OR ANY PROPERTY, (B) ENVIRONMENTAL LIABILITY
IN ANY WAY RELATED TO ANY COMPANY, ANY PROPERTY, OR ANY ACT, OMISSION, STATUS,
OWNERSHIP, OR OTHER RELATIONSHIP, CONDITION, OR CIRCUMSTANCE CONTEMPLATED BY,
CREATED UNDER, OR ARISING PURSUANT TO OR IN CONNECTION WITH ANY LOAN DOCUMENT,
OR (C) ANY INDEMNITEE'S SOLE OR CONCURRENT ORDINARY NEGLIGENCE.
(b) EACH INDEMNITOR SHALL JOINTLY AND SEVERALLY INDEMNIFY EACH
INDEMNITEE FROM AND AGAINST, PROTECT AND DEFEND EACH INDEMNITEE FROM AND
AGAINST, HOLD EACH INDEMNITEE HARMLESS FROM AND AGAINST, AND ON DEMAND PAY OR
REIMBURSE EACH INDEMNITEE FOR, ALL INDEMNIFIED LIABILITIES.
(c) THE FOREGOING PROVISIONS (I) ARE NOT LIMITED IN AMOUNT EVEN IF THAT
AMOUNT EXCEEDS THE OBLIGATION, (II) INCLUDE, WITHOUT LIMITATION, REASONABLE FEES
AND EXPENSES OF ATTORNEYS AND OTHER COSTS AND EXPENSES OF LITIGATION OR
PREPARING FOR LITIGATION AND DAMAGES OR INJURY TO PERSONS, PROPERTY, OR NATURAL
RESOURCES ARISING UNDER ANY STATUTORY OR COMMON LAW, PUNITIVE DAMAGES, FINES,
AND OTHER PENALTIES, AND (III) ARE NOT AFFECTED BY THE SOURCE OR ORIGIN OF ANY
HAZARDOUS SUBSTANCE, AND (IV) ARE NOT AFFECTED BY ANY INDEMNITEE'S
INVESTIGATION, ACTUAL OR CONSTRUCTIVE KNOWLEDGE, COURSE OF DEALING, OR WAIVER.
(d) No Indemnitee is entitled to be indemnified under the Loan
Documents for its own fraud, gross negligence, or willful misconduct.
43
(e) THE PROVISIONS OF AND INDEMNIFICATION AND OTHER UNDERTAKINGS UNDER
THIS SECTION SURVIVE THE SATISFACTION OF THE OBLIGATION AND THE TERMINATION OF
THE LOAN DOCUMENTS.
7.13 REIT STATUS. At all times, the Trust (including its organization
and method of operations and those of its Consolidated Affiliates) shall qualify
as a REIT.
7.14 ERISA EXEMPTIONS. At all times, the Trust shall qualify as a "REAL
ESTATE OPERATING COMPANY" under the 29 C.F.R. ss. 2510.3-101(e) (or any
successor regulation) or other appropriate exemption such that its assets shall
not be deemed "PLAN ASSETS" as defined in 29 C.F.R. ss. 2510.3-101(a)(1) (or any
successor regulation) of any Employee Plan or Multi-employer Plan.
7.15 LISTED COMPANY. The common Stock of the Trust shall at all times
be listed for trading and be traded on the New York Stock Exchange, the American
Stock Exchange, or the Nasdaq Stock Market.
7.16 PROPERTIES.
(a) Borrowers shall cause all of the Companies' Properties to be
operated, maintained, and managed at all times in a professional manner
(including all marketing, advertising, and promotional programs). Borrowers
shall keep in effect (or cause to be kept in effect) at all times all permits
and contractual arrangements as may be necessary to meet the standards of
operation described in the foregoing sentence.
(b) Borrowers shall cause construction, renovation, and rehabilitation
work with respect to all of the Companies' Properties to be performed in a good
and workmanlike manner substantially in accordance with all Governmental
Requirements and restrictions affecting such Properties.
SECTION 8
NEGATIVE COVENANTS
So long as Lenders are committed to fund any Borrowings or fund or
issue any LCs under this Agreement and until the Obligation is paid in full,
Borrowers covenant and agree as follows:
8.1 PAYMENT OF OBLIGATIONS. Borrowers shall not, and shall not permit
any Company to, voluntarily prepay principal of, or interest on, any Liabilities
other than the Obligation, if a Default has occurred and is continuing at the
time of such voluntary prepayment.
8.2 EMPLOYEE PLANS. Borrowers shall not, and shall not permit any
Company to, permit any of the events or circumstances described in SECTION 6.10
to exist or occur.
8.3 TRANSACTIONS WITH AFFILIATES. Except as disclosed on SCHEDULE 6.14
(as supplemented from time to time to reflect changes as a result of
transactions permitted by this Agreement or approved by Required Lenders),
Borrowers shall not, and shall not permit any Company to, enter into any
material transaction with any of its Affiliates, other than transactions in the
ordinary course of business and upon fair and reasonable terms not materially
less favorable than it could obtain or could become entitled to in an
arm's-length transaction with a Person that was not its Affiliate.
44
8.4 COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS AND DOCUMENTS. Borrowers
shall not, and shall not permit any Company to, (a) violate the provisions of
any Governmental Requirements applicable to it or of any material agreement to
which it is a party, (b) violate the provisions of its Constituent Documents, or
(c) repeal, replace, or amend any provision of its Constituent Documents, in
each case where any of the foregoing could result in a Material Adverse Event.
8.5 LOANS, ADVANCES, AND INVESTMENTS. Borrowers shall not permit the
Companies to have or make any investments in:
(a) Properties consisting of raw land, non-income producing Properties,
and other Properties that are not Hotels exceeding in the aggregate fifteen
percent (15%) of Total Assets; or
(b) The Stock of Persons (including corporations, partnerships, joint
ventures, and similar entities) that are not Consolidated Affiliates accounted
for on an equity basis (determined in accordance with GAAP) exceeding in the
aggregate fifteen percent (15%) of Total Assets; or
(c) The investments described in (A) through (B) above exceeding in the
aggregate twenty-five percent (25%) of Total Assets.
8.6 DIVIDENDS AND DISTRIBUTIONS. Borrowers shall not, and shall not
permit any Company to, declare, make or pay (a) any Distribution other than
Permitted Distributions, or (b) any Redemption other than Permitted Redemptions.
Borrowers shall not, and shall not permit any Company to, enter into or permit
to exist any arrangement or agreement (other than this Agreement) that prohibits
it from paying Distributions to the holders of its Stock.
8.7 SALE OF ASSETS. Borrowers shall not, and shall not permit any
Company to, sell, assign, lease, transfer, or otherwise dispose of all or
substantially all of the assets of the Companies on a consolidated basis.
8.8 MERGERS AND DISSOLUTIONS. Borrowers shall not merge or consolidate
with any other Person or liquidate, wind up, or dissolve (or suffer any
liquidation or dissolution).
8.9 ASSIGNMENT. Borrowers shall not, and shall not permit any Company
to, assign or transfer any of its Rights, duties, or obligations under any of
the Loan Documents.
8.10 FISCAL YEAR AND ACCOUNTING METHODS. Borrowers shall not, and shall
not permit any Company to, change its fiscal year or its method of accounting
(other than changes required or allowed by GAAP).
8.11 NEW BUSINESSES. Borrowers shall not, and shall not permit any
Company to, engage in any type of business except the types of businesses in
which they are presently engaged and any other reasonably related business.
8.12 GOVERNMENT REGULATIONS. Borrowers shall not, and shall not permit
any Company to, conduct its business in a way that it becomes regulated under
the INVESTMENT COMPANY ACT OF 1940, as amended, or the PUBLIC UTILITY HOLDING
COMPANY ACT OF 1935, as amended.
8.13 INTEREST RATE AGREEMENTS. Borrowers shall not permit, as of any
date, the amount of Principal Debt that is not either subject to a fixed
interest rate or hedged pursuant to an Interest Rate Agreement acceptable to
Administrative Agent ("VARIABLE RATE DEBT") to exceed twenty-five percent (25%)
45
of the amount of Principal Debt for more than three (3) Business Days; PROVIDED
THAT Eurodollar Borrowings shall be deemed to be subject to a fixed rate.
8.14 SUBSIDIARY GUARANTORS. No Subsidiary Guarantor shall: (a) create,
incur, assume, guarantee, or suffer to exist any Liabilities, other than (i) the
Obligation, (ii) trade payables created in the ordinary course of business,
(iii) endorsements of negotiable instruments in the ordinary course of business,
(iv) contingent Liabilities covered by reserves or insurance, and (v) equipment
leases incurred in the ordinary course of business; or (b) create, incur, or
suffer or permit to be created or incur or exist any Lien upon any of its
assets, except Permitted Liens.
SECTION 9
FINANCIAL COVENANTS
So long as Lenders are committed to fund Borrowings or fund or issue
any LCs under this Agreement and until the Obligation is paid and performed in
full, Borrowers covenant and agree that Borrowers shall not directly or
indirectly permit:
9.1 INTEREST COVERAGE RATIO. As of the last day of any fiscal quarter,
the ratio of (a) Adjusted EBITDA, to (b) Interest Expense, in each case for the
Companies on a consolidated basis and for the twelve (12) month period ending on
the date of determination, to be less than 3.0 to 1.0.
9.2 FIXED CHARGE COVERAGE RATIO. As of the last day of any fiscal
quarter, the ratio of (a) EBITDA, to (b) Fixed Charges, in each case for the
Companies on a consolidated basis and for the twelve (12) month period ending on
the date of determination, to be less than 2.25 to 1.0.
9.3 ADJUSTED FIXED CHARGE COVERAGE RATIO. As of the last day of any
fiscal quarter, the ratio of (a) EBITDA, to (b) Adjusted Fixed Charges, in each
case for the Companies on a consolidated basis and for the twelve (12) month
period ending on the date of determination, to be less than 2.0 to 1.0.
9.4 SECURED INDEBTEDNESS. As of the last day of any fiscal quarter, the
ratio of (a) Secured Debt of the Companies, on a consolidated basis, to (b)
Total Assets, in each case as of such date, to exceed 0.30 to 1.0.
9.5 TOTAL INDEBTEDNESS TO INVESTMENTS IN HOTELS. As of the last day of
any fiscal quarter, the ratio of (a) all Indebtedness of the Companies on a
consolidated basis, to (b) THE SUM OF the Approved Costs of all Hotels owned by
the Companies as of the date of determination, in each case as of such date, to
exceed 0.40 to 1.0.
9.6 TOTAL INDEBTEDNESS TO IMPLIED VALUE. As of the last day of any
fiscal quarter, the Total Indebtedness to Implied Value Ratio to exceed 0.40 to
1.0.
9.7 MINIMUM TANGIBLE NET WORTH. As of the last day of any fiscal
quarter, Tangible Net Worth to be less than THE SUM OF (a) $395,140,713, and (b)
eighty-five percent (85%) of the amount of Net Proceeds of any Equity Issuances
subsequent to the Closing Date.
9.8 UNSECURED DEBT TO UNENCUMBERED IMPLIED VALUE RATIO. As of the last
day of any fiscal quarter, the Unsecured Debt to Unencumbered Implied Value
Ratio to exceed 0.5 to 1.0.
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SECTION 10
DEFAULT
The term "DEFAULT" means the occurrence of any one or more of the
following events:
10.1 PAYMENT OF OBLIGATION. The failure of any Obligor to pay (a) any
part of the Obligation (other than the Principal Debt or other principal of the
Obligation on the Termination Date) within three (3) days after such payment
became due, or (b) any Principal Debt or other principal of the Obligation on
the Termination Date.
10.2 COVENANTS. The failure of any Obligor to punctually and properly
perform, observe, and comply with:
(a) any covenant or agreement contained in SECTION 4; or
(b) any covenant or agreement contained in SECTION 7.1, and such
failure shall continue for ten (10) days after Borrowers receive notice from
Administrative Agent of such failure; or
(c) any covenant or agreement contained in SECTION 9 and such failure
shall continue for ten (10) days after such failure occurred; or
(d) any other covenant or agreement contained in any Loan Document
(other than the covenants to pay the principal of and interest on the Obligation
and the covenants in (A), (B), or (C) preceding) and if such failure is
susceptible to being cured within the appropriate time, then such failure shall
continue for thirty (30) days after the earlier to occur of the date (i) any
Responsible Officer of Borrower knows of, or (ii) Borrowers receive notice from
Administrative Agent of, such failure.
10.3 DEBTOR RELIEF. Any Company (a) is not Solvent, (b) fails to pay
its Liabilities generally as they become due, (c) voluntarily seeks, consents
to, or acquiesces in the benefit of any Debtor Relief Law, or (d) becomes a
party to or is made the subject of any proceeding provided for by any Debtor
Relief Law, other than as a creditor or claimant, that could suspend or
otherwise adversely affect the Rights of any Credit Party granted in the Loan
Documents (unless, if the proceeding is involuntary, the applicable petition is
dismissed within sixty (60) days after its filing).
10.4 JUDGMENTS AND ATTACHMENTS. Any Company fails, within sixty (60)
days after entry, to pay, bond, or otherwise discharge any judgment or order for
the payment of money in excess of $5,000,000 (individually or collectively) or
any warrant of attachment, sequestration or similar proceeding against any
Company's assets having a value (individually or collectively) of $5,000,000
which is neither (a) stayed on appeal nor (b) diligently contested in good faith
by appropriate proceedings and adequate reserves have been set aside on its
books in accordance with GAAP.
10.5 GOVERNMENT ACTION.
(a) A final non-appealable order is issued by any Governmental
Authority (including the United States Justice Department) requiring any Company
to divest all or a substantial portion of its assets under any antitrust,
restraint of trade, unfair competition, industry regulation, or similar
Governmental Requirements, or
47
(B) any Governmental Authority seizes or otherwise appropriates, or
takes custody or control of, all or any substantial portion of the assets of any
Company, other than through condemnation proceeding.
10.6 MISREPRESENTATION. Any material representation or warranty made by
any Company contained in any Loan Document at any time proves to have been
incorrect in any material respect when made.
10.7 DEFAULT UNDER OTHER AGREEMENTS.
(a) Any Company shall fail to make any payment in respect of any
Indebtedness in excess of $15,000,000 (individual or in the aggregate) when due
or within any applicable grace period, if any; or
(b) A default shall occur in respect of any credit agreement, note,
mortgage, indenture, or other agreement or document evidencing, securing, or
otherwise relating to any Indebtedness in excess of $15,000,000 (individual or
in the aggregate) (other than a failure to make any payment when due in respect
of any such Indebtedness) and such default shall continue for more than the
period of grace, if any, specified therein or otherwise granted by the lender
thereof.
10.8 VALIDITY AND ENFORCEABILITY OF LOAN DOCUMENTS. Any Loan Document
at any time after its execution and delivery ceases to be in full force and
effect in any material respect or is declared by a Governmental Authority to be
null and void or its validity or enforceability is contested by any Company, or
any Company denies that it has any further liability or obligations under any
Loan Document to which it is a party.
10.9 MANAGEMENT CHANGES. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ shall cease to be active in the
management of the Trust.
10.10 CHANGE IN CONTROL. A Change in Control shall occur.
10.11 PLAN ASSETS. The assets of any Company at any time constitute
assets, within the meaning of ERISA, the Code, and the respective regulations
promulgated thereunder, of any Employee Plan or Multi-employer Plan.
10.12 DEFAULT UNDER OPERATING LEASES. The failure of any Company to
punctually and properly perform, observe, and comply with any material covenant
or agreement contained in any Operating Lease having annual lease payments of
$10,000,000 or more (individually or in the aggregate) and such default shall
continue for more than any applicable grace period, if any.
SECTION 11
RIGHTS AND REMEDIES
11.1 REMEDIES UPON DEFAULT.
(a) DEBTOR RELIEF. If a Default (i) occurs under SECTION 10.3(C) or (D)
(and in the case of (D), such Default shall not have been remedied during any
period of grace contained therein), or (ii) occurs and is continuing under
SECTION 10.3(A) or (B), the commitment to extend credit under this Agreement
automatically terminates, the entire unpaid balance of the Obligation
automatically becomes due and payable without any action of any kind whatsoever.
48
(b) OTHER DEFAULTS. If a Default occurs and is continuing, subject to
the terms of SECTION 13.9(B), then Administrative Agent may, and upon the
request of the Required Lenders shall, do any one or more of the following: (i)
if the maturity of the Obligation has not already been accelerated under SECTION
11.1(A), then declare the entire unpaid balance of all or any part of the
Obligation immediately due and payable, whereupon it is due and payable; (ii)
terminate the commitments of Lenders to extend credit under this Agreement;
(iii) reduce any claim to judgment; and (iv) exercise any and all other legal or
equitable Rights afforded by the Loan Documents, the Governmental Requirements
of the State of Texas, or any other applicable jurisdiction.
11.2 WAIVERS. To the extent permitted by applicable law, each Company
waives presentment and demand for payment, protest, notice of intention to
accelerate, notice of acceleration, and notice of protest and nonpayment, and
agrees that its liability with respect to all or any part of the Obligation is
not affected by any renewal or extension in the time of payment of all or any
part of the Obligation, by any indulgence, or by any release or change in any
security for the payment of all or any part of the Obligation.
11.3 PERFORMANCE BY ADMINISTRATIVE AGENT. If any covenant, duty, or
agreement of Borrowers is not performed in accordance with the terms of the Loan
Documents, Administrative Agent may, while a Default exists, at its option,
perform, or attempt to perform that covenant, duty, or agreement on behalf of
Borrowers (and any amount expended by Administrative Agent in its performance or
attempted performance is payable by to Administrative Agent on demand, becomes
part of the Obligation, and bears interest at the Default Rate from the date of
Administrative Agent's expenditure until paid). However, neither Administrative
Agent nor any Lender assumes or shall have, except by its express written
consent, any liability or responsibility for the performance of any covenant,
duty, or agreement of Borrowers.
11.4 NOT IN CONTROL. None of the covenants or other provisions
contained in any Loan Document shall, or shall be deemed to, give any Agent or
any Lender the Right to exercise control over the assets (including real
Property), affairs, or management of any Company.
11.5 COURSE OF DEALING. The acceptance by any Agent or any Lender of
any partial payment on the Obligation shall not be deemed to be a waiver of any
Default then existing. No waiver by any Credit Party of any Default shall be
deemed to be a waiver of any other then-existing or subsequent Default. No delay
or omission by any Credit Party in exercising any Right under the Loan Documents
will impair that Right or be construed as a waiver thereof or any acquiescence
therein, nor will any single or partial exercise of any Right preclude other or
further exercise thereof or the exercise of any other Right under the Loan
Documents or otherwise.
11.6 CUMULATIVE RIGHTS. All Rights available to the Credit Parties
under the Loan Documents are cumulative of and in addition to all other Rights
granted to the Credit Parties at law or in equity, whether or not the Obligation
is due and payable and whether or not Agents or Lenders have instituted any suit
for collection, foreclosure, or other action in connection with the Loan
Documents.
11.7 APPLICATION OF PROCEEDS. Any and all proceeds ever received by any
Credit Party from the exercise of any Rights pertaining to the Obligation shall
be applied to the Obligation according to SECTION 3.11.
11.8 CERTAIN PROCEEDINGS. Borrowers shall promptly execute and deliver,
or cause the execution and delivery of, all applications, certificates,
instruments, and all other documents and papers Administrative Agent reasonably
requests in connection with the obtaining of any consent, approval,
registration, qualification, permit, license, or authorization of any
Governmental Authority or other Person necessary or appropriate for the
effective exercise of any Rights under the Loan Documents. Because Borrowers
agree
49
that Agents' and Lenders' remedies at law for failure of Borrowers to comply
with the provisions of this paragraph would be inadequate and that failure would
not be adequately compensable in damages, Borrowers agree that the covenants of
this SECTION 11.8 may be specifically enforced.
SECTION 12
AGENTS AND LENDERS
12.1 AGENTS.
(a) APPOINTMENT. Each Lender appoints Administrative Agent (including,
without limitation, each successor Agent in accordance with this SECTION 12) as
its nominee and agent to act in its name and on its behalf (and Administrative
Agent and each such successor accepts that appointment): (i) to act as its
nominee and on its behalf in and under all Loan Documents; (ii) to arrange the
means whereby its funds are to be made available to Borrowers under the Loan
Documents; (iii) to take any action that it properly requests under the Loan
Documents (subject to the concurrence of other Lenders as may be required under
the Loan Documents); (iv) to receive all documents and items to be furnished to
it under the Loan Documents; (v) to be the secured party, mortgagee,
beneficiary, recipient, and similar party in respect of any collateral, for the
benefit of Lenders; (vi) to promptly distribute to it all Financial Statements,
Borrowing Base Reports, notices received hereunder, and other items specifically
required to be delivered to it hereunder, and, upon request, such other material
information, requests, documents, and items received under the Loan Documents;
(vii) to promptly distribute to it its ratable part of each payment or
prepayment (whether voluntary, as proceeds of collateral upon or after
foreclosure, as proceeds of insurance thereon, or otherwise) in accordance with
the terms of the Loan Documents; and (viii) to deliver to the appropriate
Persons requests, demands, approvals, and consents received from it. However,
Administrative Agent may not be required to take any action that exposes it to
personal liability or that is contrary to any Loan Document or applicable
Governmental Requirement.
(b) SUCCESSOR. Administrative Agent may assign all of its Rights and
obligations as Administrative Agent under the Loan Documents to any of its
Affiliates, which Affiliate shall then be the successor Administrative Agent
under the Loan Documents. Administrative Agent may also voluntarily resign by
giving thirty (30) days' prior written notice to Borrowers and Lenders, and
shall resign upon the request of the Required Lenders for cause (i.e.,
Administrative Agent is continuing to fail to perform its responsibilities as
Administrative Agent under the Loan Documents). If the initial or any successor
Administrative Agent ever ceases to be a party to this Agreement or if the
initial or any successor Administrative Agent ever resigns (whether voluntarily
or at the request of the Required Lenders), then the Required Lenders shall
(which, if no Default or Potential Default exists, is subject to Borrowers'
approval that may not be unreasonably withheld) appoint the successor
Administrative Agent from among Lenders (other than the resigning Administrative
Agent). If the Required Lenders fail to appoint a successor Administrative Agent
within thirty (30) days after the resigning Administrative Agent has given
notice of resignation or the Required Lenders have removed the resigning
Administrative Agent, then the resigning Administrative Agent may, on behalf of
Lenders, appoint a successor Administrative Agent (which, if no Default or
Potential Default exists, is subject to Borrowers' approval that may not be
unreasonably withheld), which must be a commercial bank or other licensed
financial institution having a combined capital and surplus of at least
$1,000,000,000 (as shown on its most recently published statement of condition)
and whose debt obligations (or whose parent's debt obligations) are rated not
less than Baa1 by ▇▇▇▇▇'▇ or BBB+ by S & P. Upon its acceptance of appointment
as successor Administrative Agent, the successor Administrative Agent succeeds
to and becomes vested with all of the Rights of the prior Administrative Agent,
and the prior Administrative Agent is discharged from its duties and obligations
of Administrative Agent under the Loan Documents, and each Lender shall execute
the documents that any Lender, the resigning or removed
50
Administrative Agent, or the successor Administrative Agent reasonably request
to reflect the change. After any Administrative Agent's resignation or removal
as Administrative Agent under the Loan Documents, the provisions of this Section
inure to its benefit as to any actions taken or not taken by it while it was
Administrative Agent under the Loan Documents. If Borrowers fail to respond to
any written request for any consent required in this SECTION 12.1(B) within five
(5) Business Days after the date that Borrowers receive such request, then
Borrowers shall be deemed to have given its consent to such request.
(c) RIGHTS AS LENDER. Each Agent, in its capacity as a Lender, has the
same Rights under the Loan Documents as any other Lender and may exercise those
Rights as if it were not acting as an Agent. The term "LENDER," unless the
context otherwise indicates, includes Agents. Administrative Agent's resignation
or removal does not impair or otherwise affect any Rights that it has or may
have in its capacity as an individual Lender. Each Lender and Borrowers agree
that Agents are not a fiduciary for Lenders or for Borrowers but are simply
acting in the capacities described in this Agreement to alleviate administrative
burdens for Borrowers and Lenders, that Agents have no duties or
responsibilities to Lenders or Borrowers except those expressly set forth in the
Loan Documents, and that each Agent in its capacity as a Lender has the same
Rights as any other Lender.
(d) OTHER ACTIVITIES. Any Credit Party may now or in the future be
engaged in one or more loan, letter of credit, leasing, or other financing
transactions with Borrowers or another Company, act as trustee or depositary for
Borrowers or another Company, or otherwise be engaged in other transactions with
Borrowers (collectively, the "OTHER ACTIVITIES") not the subject of the Loan
Documents. Without limiting the Rights of Lenders specifically set forth in the
Loan Documents, no Credit Party is responsible to account to the other Credit
Parties for those other activities, and no Credit Party shall have any interest
in any other Credit Party's activities, any present or future guaranties by or
for the account of Borrowers that are not contemplated by or included in the
Loan Documents, any present or future offset exercised by any Credit Party in
respect of those other activities, any present or future Property taken as
security for any of those other activities, or any Property now or hereafter in
any Credit Party's possession or control that may be or become security for the
obligations of Borrowers arising under the Loan Documents by reason of the
general description of indebtedness secured or of Property contained in any
other agreements, documents, or instruments related to any of those other
activities (but, if any payments in respect of those guaranties or that Property
or the proceeds thereof is applied by any Credit Party to reduce the Obligation,
then each Lender is entitled to share ratably in the application as provided in
the Loan Documents).
(e) DOCUMENTATION AGENT. Documentation Agent, solely in such capacity,
shall have no Rights, duties, or obligations hereunder, except as specifically
provided in this Agreement. Documentation Agent (a) may voluntarily resign by
notice to Administrative Agent, Lenders, and Borrowers, and (b) shall resign
upon the request of the Required Lenders for cause. Upon the resignation of
Documentation Agent, the Required Lenders may elect to designate a successor
Documentation Agent (which, if no Default or Potential Default exists, is
subject to Borrowers' approval that may not be unreasonably withheld), which
must be a Lender who is a commercial bank or other licensed financial
institution having a combined capital and surplus of at least $1,000,000,000 (as
shown on its most recently published statement of condition) and whose debt
obligations (or whose parent's debt obligations) are rated not less than Baa1 by
▇▇▇▇▇'▇ or BBB+ by S & P.
(f) SYNDICATION AGENT. Syndication Agent, solely in such capacity,
shall have no Rights, duties, or obligations hereunder, except as specifically
provided in this Agreement. Syndication Agent (a) may voluntarily resign by
notice to Administrative Agent, Lenders, and Borrowers, and (b) shall resign
upon the request of the Required Lenders for cause. Upon the resignation of
Syndication Agent, the Required Lenders may elect to designate a successor
Syndication Agent (which, if no Default or Potential Default exists, is subject
to Borrowers' approval that may not be unreasonably withheld), which must be a
Lender who is a commercial bank or other licensed financial institution having a
combined capital and surplus of at least
51
$1,000,000,000 (as shown on its most recently published statement of condition)
and whose debt obligations (or whose parent's debt obligations) are rated not
less than Baa1 by ▇▇▇▇▇'▇ or BBB+ by S & P.
(g) CO-AGENTS. Co-Agents, solely in such capacity, shall have no
Rights, duties, or obligations hereunder, except as specifically provided in
this Agreement.
12.2 EXPENSES. Should Administrative Agent commence any proceeding or
in any way seek to enforce its Rights under the Loan Documents, irrespective of
whether as a result thereof Administrative Agent shall acquire title to any
collateral, either through foreclosure, deed in lieu of foreclosure, or
otherwise, each Lender, upon demand therefor from time to time, shall contribute
its share (based on its Pro Rata Share) of the reasonable costs and/or expenses
of any such enforcement or acquisition, including, but not limited to, fees of
receivers or trustees, court costs, title company charges, filing and recording
fees, appraisers' fees and fees and expenses of attorneys to the extent not
otherwise reimbursed by Borrowers. Without limiting the generality of the
foregoing, each Lender shall contribute its share (based on its Pro Rata Share)
of all reasonable costs and expenses incurred by Administrative Agent (including
reasonable attorneys' fees and expenses) if Administrative Agent employs counsel
for advice or other representation (whether or not any suit has been or shall be
filed) with respect to any collateral or any part thereof, or any of the Loan
Documents, or the attempt to enforce any Lien in any of the collateral, or to
enforce any Rights of Administrative Agent or any of Borrowers' or any other
Company's obligations under any of the Loan Documents, but not with respect to
any dispute between Administrative Agent and any other Lender(s). Any loss of
principal and interest resulting from any Default shall be shared by Lenders in
accordance with their respective Pro Rata Share. It is understood and agreed
that if Administrative Agent determines that it is necessary to engage counsel
for Lenders from and after the occurrence of a Potential Default or Default,
then said counsel shall be selected by Administrative Agent and written notice
of the same shall be delivered to Lenders.
12.3 PROPORTIONATE ABSORPTION OF LOSSES. Except as otherwise provided
in the Loan Documents, nothing in the Loan Documents gives any Lender any
advantage over any other Lender insofar as the Obligation is concerned or
relieves any Lender from ratably absorbing any losses sustained with respect to
the Obligation (except to the extent unilateral actions or inactions by any
Lender result in Borrowers or any other Company on the Obligation having any
credit, allowance, setoff, defense, or counterclaim solely with respect to all
or any part of that Lender's Pro Rata Share of the Obligation).
12.4 DELEGATION OF DUTIES; RELIANCE. Lenders may perform any of their
duties or exercise any of their Rights under the Loan Documents by or through
any Agent, and Lenders and any Agent may perform any of their duties or exercise
any of their Rights under the Loan Documents by or through their respective
Representatives. Each Agent, Lenders, and their respective Representatives (a)
are entitled to rely upon (and shall be protected in relying upon) any written
or oral statement believed by it or them to be genuine and correct and to have
been signed or made by the proper Person and, with respect to legal matters,
upon opinion of counsel selected by such Agent or that Lender (but nothing in
this CLAUSE (A) permits any Agent to rely on (i) oral statements if a writing is
required by this Agreement or (ii) any other writing if a specific writing is
required by this Agreement), (b) are entitled to deem and treat each Lender as
the owner and holder of its portion of the Obligation for all purposes until
written notice of the assignment or transfer is given to and received by
Administrative Agent (and any request, authorization, consent, or approval of
any Lender is conclusive and binding on each subsequent holder, assignee, or
transferee of or Participant in that Lender's portion of the Obligation until
that notice is given and received), (c) are not deemed to have notice of the
occurrence of a Default unless a Responsible Officer of such Agent, who handles
matters associated with the Loan Documents and transactions thereunder, has
actual knowledge or such Agent has been notified by a Lender or Borrowers, and
(d) are entitled to consult with legal counsel (including counsel for
Borrowers),
52
independent accountants, and other experts selected by such Agent and are not
liable for any action taken or not taken in good faith by it in accordance with
the advice of counsel, accountants, or experts.
12.5 LIMITATION OF AGENTS' LIABILITY.
(a) EXCULPATION. No Agent nor any of their Affiliates or
Representatives will be liable for any action taken or omitted to be taken by it
or them under the Loan Documents in good faith and believed by it or them to be
within the discretion or power conferred upon it or them by the Loan Documents
or be responsible for the consequences of any error of judgment (except for
fraud, gross negligence, or willful misconduct), and no Agent nor any of its
Affiliates or Representatives has a fiduciary relationship with any Lender by
virtue of the Loan Documents (but nothing in this Agreement negates the
obligation of Administrative Agent to account for funds received by it for the
account of any Lender).
(b) INDEMNITY. Unless indemnified to its satisfaction against loss,
cost, liability, and expense, no Agent may be compelled to do any act under the
Loan Documents or to take any action toward the execution or enforcement of the
powers thereby created or to prosecute or defend any suit in respect of the Loan
Documents. If an Agent requests instructions from Lenders, or the Required
Lenders, as the case may be, with respect to any act or action in connection
with any Loan Document, then such Agent is entitled to refrain (without
incurring any liability to any Person by so refraining) from that act or action
unless and until it has received instructions. In no event, however, may any
Agent or any of its Representatives be required to take any action that it or
they determine could incur for it or them criminal or onerous civil liability.
Without limiting the generality of the foregoing, no Lender has any Right of
action against any Agent as a result of such Agent's acting or refraining from
acting under this Agreement in accordance with instructions of the Required
Lenders.
(c) RELIANCE. No Agent is responsible to any Lender or any Participant
for, and each Lender represents and warrants that it has not relied upon any
Agent in respect of, (i) the creditworthiness of any Company and the risks
involved to that Lender, (ii) the effectiveness, enforceability, genuineness,
validity, or the due execution of any Loan Document (EXCEPT by such Agent),
(iii) any representation, warranty, document, certificate, report, or statement
made therein (EXCEPT by such Agent) or furnished thereunder or in connection
therewith, (iv) the adequacy of any collateral now or hereafter securing the
Obligation or the existence, priority, or perfection of any Lien now or
hereafter granted or purported to be granted on any collateral under any Loan
Document, or (v) observation of or compliance with any of the terms, covenants,
or conditions of any Loan Document on the part of any Company. EACH LENDER
AGREES TO INDEMNIFY EACH AGENT AND ITS REPRESENTATIVES AND HOLD THEM HARMLESS
FROM AND AGAINST (BUT LIMITED TO SUCH LENDER'S PRO RATA SHARE OF) ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS,
COSTS, REASONABLE EXPENSES, AND REASONABLE DISBURSEMENTS OF ANY KIND OR NATURE
WHATSOEVER THAT MAY BE IMPOSED ON, ASSERTED AGAINST, OR INCURRED BY THEM IN ANY
WAY RELATING TO OR ARISING OUT OF THE LOAN DOCUMENTS OR ANY ACTION TAKEN OR
OMITTED BY THEM UNDER THE LOAN DOCUMENTS IF SUCH AGENT AND ITS REPRESENTATIVES
ARE NOT REIMBURSED FOR SUCH AMOUNTS BY ANY COMPANY. ALTHOUGH EACH AGENT AND ITS
REPRESENTATIVES HAVE THE RIGHT TO BE INDEMNIFIED UNDER THIS AGREEMENT FOR ITS OR
THEIR OWN ORDINARY NEGLIGENCE, EACH AGENT AND ITS REPRESENTATIVES DO NOT HAVE
THE RIGHT TO BE INDEMNIFIED UNDER THIS AGREEMENT FOR ITS OR THEIR OWN FRAUD,
GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT.
12.6 DEFAULT. While a Default exists, Lenders agree to promptly confer
in order that the Required Lenders or Lenders, as the case may be, may agree
upon a course of action for the enforcement of the Rights of Lenders. Each Agent
is entitled to act or refrain from taking any action (without incurring any
liability
53
to any Person for so acting or refraining) unless and until it has received
instructions from the Required Lenders.
12.7 LIMITATION OF LIABILITY. No Lender or any Participant will incur
any liability to any other Lender or Participant except for acts or omissions in
bad faith, and neither Administrative Agent nor any Lender or Participant will
incur any liability to any other Person for any act or omission of any other
Lender or any Participant.
12.8 RELATIONSHIP OF LENDERS. The Loan Documents do not create a
partnership or joint venture among the Credit Parties.
12.9 BENEFITS OF AGREEMENT. None of the provisions of this SECTION
inure to the benefit of any Company or any other Person EXCEPT the Credit
Parties. Therefore, no Company nor any other Person is responsible or liable
for, entitled to rely upon, or entitled to raise as a defense -- in any manner
whatsoever -- the failure of any Credit Party to comply with these provisions.
12.10 APPROVAL OF LENDERS.
(a) All communications from Administrative Agent to Lenders requesting
Lenders' determination, consent, approval, or disapproval (i) shall be given in
the form of a written notice to each Lender, (ii) shall be accompanied by a
description of the matter or thing as to which such determination, approval,
consent, or disapproval is requested, or shall advise each Lender where such
matter or thing may be inspected, or shall otherwise describe the matter or
issue to be resolved, (iii) shall include, if reasonably requested by a Lender
and to the extent not previously provided to such Lender, written materials and
a summary of all oral information provided to Administrative Agent by Borrowers
in respect of the matter or issue to be resolved, and (iv) shall include
Administrative Agent's recommended course of action or determination in respect
thereof. Each Lender shall reply promptly, but in any event (x) within thirty
(30) days (or such lesser period as may be required under the Loan Documents for
Administrative Agent to respond) for those matters requiring the consent by all
Lenders, and (y) within fifteen (15) Business Days (or such lesser period as may
be required under the Loan Documents for Administrative Agent to respond) for
those matters requiring the consent by the Required Lenders, in each instance,
after receipt of the request therefore by Administrative Agent (in either event,
the "LENDER REPLY PERIOD").
(b) If the Lender Reply Period is conspicuously set forth in a written
notice from Administrative Agent to a Lender, then unless such Lender shall give
written notice to Administrative Agent that it objects to the recommendation or
determination of Administrative Agent within the Lender Reply Period, such
Lender shall be deemed to have approved of or consented to such recommendation
or determination if such written notice from Administrative Agent shall
conspicuously state that such approval or consent shall be deemed given unless a
response is received within the Lender Reply Period.
SECTION 13
MISCELLANEOUS
13.1 HEADINGS. The headings, captions and arrangements used in any of
the Loan Documents are, unless specified otherwise, for convenience only and
shall not be deemed to limit, amplify, or modify the terms of the Loan
Documents, nor affect the meaning thereof.
13.2 NONBUSINESS DAYS; TIME. Any payment or action that is due under
any Loan Document on a non-Business Day may be delayed until the next-succeeding
Business Day (but interest shall continue
54
to accrue on any applicable payment until payment is in fact made) unless the
payment concerns a Eurodollar Borrowing, in which case if the next-succeeding
Business Day is in the next calendar month, then such payment shall be made on
the next-preceding Business Day.
13.3 COMMUNICATIONS. Unless otherwise specifically provided, whenever
any Loan Document requires or permits any consent, approval, notice, request,
demand, or other communication from one party to another, communication must be
in writing (which may be by telex or telecopy) to be effective and shall be
deemed to have been given (a) if by telex, when transmitted to the appropriate
telex number and the appropriate answerback is received, (b) if by telecopy,
when transmitted to the appropriate telecopy number (and all communications sent
by telecopy must be confirmed promptly thereafter by telephone; but any
requirement in this parenthetical shall not affect the date when the telecopy
shall be deemed to have been delivered), (c) if by mail, on the fifth (5th)
Business Day after it is enclosed in an envelope and properly addressed,
stamped, sealed, certified mail, return receipt requested, and deposited in the
appropriate official postal service, or (d) if by any other means, when actually
delivered. Until changed by notice pursuant to this Agreement, the address (and
telecopy number) for each party to a Loan Document is set forth on SCHEDULE 1.
13.4 FORM AND NUMBER OF DOCUMENTS. The form, substance, and number of
counterparts of each writing to be furnished under this Agreement must be
satisfactory to Agents and their counsel.
13.5 SURVIVAL. All covenants, agreements, undertakings,
representations, and warranties made in any of the Loan Documents survive all
closings under the Loan Documents and, except as otherwise indicated, are not
affected by any investigation made by any party.
13.6 GOVERNING LAW. EXCEPT AS EXPRESSLY PROVIDED IN A LOAN DOCUMENT,
THE GOVERNMENTAL REQUIREMENTS (OTHER THAN CONFLICT-OF-LAWS PROVISIONS) OF THE
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ OF AMERICA GOVERN THE RIGHTS AND DUTIES
OF THE PARTIES TO THE LOAN DOCUMENTS AND THE VALIDITY, CONSTRUCTION,
ENFORCEMENT, AND INTERPRETATION OF THE LOAN DOCUMENTS.
13.7 INVALID PROVISIONS. Any provision in any Loan Document held to be
illegal, invalid, or unenforceable is fully severable; the appropriate Loan
Document shall be construed and enforced as if that provision had never been
included; and the remaining provisions shall remain in full force and effect and
shall not be affected by the severed provision. Agents, Lenders, and Borrowers
agree to negotiate, in good faith, the terms of a replacement provision as
similar to the severed provision as may be possible and be legal, valid and
enforceable. However, if the provision held to be illegal, invalid, or
unenforceable is a material part of this Agreement, such invalid, illegal, or
unenforceable provision shall be, to the extent permitted by applicable law,
replaced by a clause or provision judicially construed and interpreted to be as
similar in substance and content to the original terms of such illegal, invalid,
or unenforceable clause or provision as the context thereof would reasonably
allow, so that such clause or provision would thereafter be legal, valid, and
enforceable.
13.8 VENUE; SERVICE OF PROCESS; JURY TRIAL. EACH PARTY TO ANY LOAN
DOCUMENT, IN EACH CASE FOR ITSELF, ITS SUCCESSORS AND ASSIGNS (AND IN THE CASE
OF BORROWERS, FOR EACH OF ITS CONSOLIDATED AFFILIATES), (a) IRREVOCABLY SUBMITS
TO THE NONEXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS OF THE STATE OF
TEXAS, (b) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
LITIGATION ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS AND THE
OBLIGATION BROUGHT IN DISTRICT COURTS OF DALLAS COUNTY, TEXAS, OR IN THE UNITED
STATES DISTRICT COURT IN DALLAS COUNTY, TEXAS, (c) IRREVOCABLY WAIVES
55
ANY CLAIMS THAT ANY LITIGATION BROUGHT IN ANY OF THE AFOREMENTIONED COURTS HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM, (d) IRREVOCABLY CONSENTS TO THE SERVICE
OF PROCESS OUT OF ANY OF THOSE COURTS IN ANY LITIGATION BY THE MAILING OF COPIES
THEREOF BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, BY
HAND-DELIVERY, OR BY DELIVERY BY A NATIONALLY RECOGNIZED COURIER SERVICE, AND
SERVICE SHALL BE DEEMED COMPLETE UPON DELIVERY OF THE LEGAL PROCESS AT ITS
ADDRESS SET FORTH IN THIS AGREEMENT, (e) IRREVOCABLY AGREES THAT ANY LEGAL
PROCEEDING AGAINST ANY PARTY TO ANY LOAN DOCUMENT ARISING OUT OF OR IN
CONNECTION WITH THE LOAN DOCUMENTS OR THE OBLIGATION MAY BE BROUGHT IN ONE OF
THE AFOREMENTIONED COURTS, AND (f) IRREVOCABLY WAIVES TO THE FULLEST EXTENT
PERMITTED BY LAW, ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF ANY LOAN DOCUMENT. The scope of each of the
foregoing waivers is intended to be all-encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter of this
transaction, including contract claims, tort claims, breach of duty claims, and
all other common law and statutory claims. Each Borrower (for itself and on
behalf of each of its Consolidated Affiliates) acknowledges that these waivers
are a material inducement to each Credit Party's agreement to enter into a
business relationship, that each Credit Party has already relied on these
waivers in entering into this Agreement, and that each Credit Party will
continue to rely on each of these waivers in related future dealings. Each
Borrower (for itself and on behalf of each of its Consolidated Affiliates)
further warrants and represents that it has reviewed these waivers with its
legal counsel, and that it knowingly and voluntarily agrees to each waiver
following consultation with legal counsel. THE WAIVERS IN THIS SECTION 13.8 ARE
IRREVOCABLE, MEANING THAT THEY MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THESE WAIVERS SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS, OR
REPLACEMENTS TO OR OF THIS OR ANY OTHER LOAN DOCUMENT. In the event of
Litigation, this Agreement may be filed as a written consent to a trial by the
court.
13.9 AMENDMENTS, CONSENTS, CONFLICTS, AND WAIVERS.
(a) REQUIRED LENDERS. Unless otherwise specifically provided, the
provisions of this Agreement may be amended, modified, or waived, only by an
instrument in writing executed by Borrowers and the Required Lenders and
supplemented only by documents delivered or to be delivered in accordance with
the express terms of this Agreement.
(b) ALL LENDERS. Except as specifically otherwise provided in this
SECTION 13.9, any amendment to or consent or waiver under this Agreement or any
Loan Document that purports to accomplish any of the following must be by an
instrument in writing executed by Borrowers and executed (or approved, as the
case may be) by each Lender (other than any Defaulting Lender): (i) extends the
Maturity Date or the Termination Date; (ii) extends the due date or decreases
the amount of any scheduled payment or amortization of the Obligation or any
fees or other amounts payable hereunder beyond the date specified in the Loan
Documents; (iii) decreases any rate or amount of interest, fees, principal, or
other sums payable to the Credit Parties under this Agreement (except such
reductions as are contemplated by this Agreement); (iv) changes the definition
of "ADJUSTED NOI," "APPROVED COSTS," "CAPITALIZATION RATE," "CHANGE IN CONTROL,"
"COMMITMENT," "ELIGIBLE ASSIGNEE," "IMPLIED VALUE," "PRO RATA," "PRO RATA
SHARE," "QUALIFIED PROPERTY," "REQUIRED LENDERS," "TOTAL COMMITMENT," or "TOTAL
INDEBTEDNESS TO IMPLIED VALUE RATIO;" or (v) increases any one or more Lenders'
Commitment; (vi) waives compliance with, amends, or fully or partially releases
(or waives the requirement of) any guaranty, if any, or any collateral, if any;
(vii) permits any Borrower to assign any of its Rights hereunder; (viii) amends
SECTION 4; (ix) change the percentage of the Commitments or of the unpaid
principal amount of the Notes, or the number of Lenders, which shall be required
for Lenders or any of them
56
to take any action under this SECTION or any other provision of this Agreement;
or (x) changes this SECTION 13.9(B) or any other matter specifically requiring
the consent of all Lenders under this Agreement.
(c) AGENTS OR ISSUING BANK. Any amendment or supplement to, or waiver
or consent under, any Loan Document that purports to accomplish any of the
following must be by a writing executed by Borrowers and executed (or approved
in writing, as the case may be) by the affected Agent or Issuing Bank, as the
case may be (in addition to the Required Lenders or all Lenders, as the case may
be, as required by this SECTION 13.9): (i) extends the due date for, decreases
the amount or rate of calculation of, or waives the late or non-payment of, any
fees payable to such Agent or Issuing Bank under any Loan Document, EXCEPT, in
each case, any adjustments or reductions that are contemplated by any Loan
Document; (ii) increases such Agent's or Issuing Bank's, as the case may be,
obligations beyond its commitments under any Loan Document; or (iii) changes
this CLAUSE (C) or any other matter specifically requiring the consent of such
Agent or Issuing Bank, as the case may be, under any Loan Document.
(d) LCS. Any LC may be renewed, extended, amended, replaced, or
canceled consistent with the terms of this Agreement by a writing executed by
Issuing Bank and Borrowers if such writing is first approved in writing by
Administrative Agent.
(e) CONFLICTS. Any conflict or ambiguity between the terms and
provisions of this Agreement and terms and provisions in any other Loan Document
is controlled by the terms and provisions of this Agreement.
(f) COURSE OF DEALING. No course of dealing or any failure or delay by
any Credit Party or any of its Representatives with respect to exercising any
Right of any Credit Party under this Agreement operates as a waiver thereof. A
waiver must be in writing and signed by the Required Lenders or Lenders, as
appropriate, to be effective, and a waiver will be effective only in the
specific instance and for the specific purpose for which it is given.
13.10 MULTIPLE COUNTERPARTS. Any Loan Document may be executed in a
number of identical counterparts, each of which shall be deemed an original for
all purposes and all of which constitute, collectively, one agreement; but, in
making proof of thereof, it shall not be necessary to produce or account for
more than one counterpart. Each Lender need not execute the same counterpart of
this Agreement so long as identical counterparts are executed by each Borrower
and each Credit Party. This Agreement shall become effective when counterparts
of this Agreement have been executed and delivered to Administrative Agent by
each Credit Party and each Borrower, or, in the case only of Lenders, when
Administrative Agent has received telecopied, telexed, or other evidence
satisfactory to it that each Lender has executed and is delivering to
Administrative Agent a counterpart of this Agreement.
13.11 ASSIGNMENTS AND PARTICIPATIONS.
(a) ASSIGNMENTS. Each Lender may assign to one or more Eligible
Assignees all or a portion of its Rights and obligations under this Agreement
(including, without limitation, all or a portion of its Borrowings, its Note,
and its Commitment); PROVIDED, HOWEVER, that:
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to an Affiliate of
such Lender to another Lender or an assignment of all of a Lender's
Rights and obligations under this Agreement, any such partial
assignment shall be in an amount at least equal to $10,000,000 or a
greater integral multiple of $1,000,000;
57
(iii) each such assignment by a Lender shall be of a constant,
and not varying, percentage of all of its Rights and obligations under
this Agreement and the Note; and
(iv) the parties to such assignment shall execute and deliver
to Administrative Agent for its acceptance an Assignment and Acceptance
(herein so called) in the form of EXHIBIT G, together with any Note
subject to such assignment and, except for an assignment by a Lender to
an Affiliate of such Lender, a processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, Rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
Rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this SECTION, the assignor,
Administrative Agent, and Borrowers shall make appropriate arrangements so that,
if required, new Notes are issued to the assignor and the assignee. If the
assignee is not incorporated under the laws of the United States of America or a
state thereof, it shall deliver to Borrowers and Administrative Agent
certification as to exemption from deduction or withholding of Taxes in
accordance with SECTION 3.19.
(b) REGISTER. Administrative Agent shall maintain at its address
referred to in SECTION 13.3, a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of Lenders and the Commitment of, and principal amount of the
Borrowings owing to, each Lender from time to time (the "REGISTER"). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and Borrowers and the Credit Parties may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by Borrowers or any
Credit Party at any reasonable time and from time to time upon reasonable prior
notice.
(c) ACCEPTANCE OF ASSIGNMENT. Upon its receipt of an Assignment and
Acceptance executed by the parties thereto, together with any Note subject to
such assignment and payment of the processing fee, Administrative Agent shall,
if such Assignment and Acceptance has been completed and is in substantially the
form of EXHIBIT G, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register, and (iii) give prompt notice
thereof to the parties thereto.
(d) PARTICIPATIONS. Each Lender may sell participations to one or more
Persons in all or a portion of its Rights and obligations under this Agreement
(including all or a portion of its Commitment and its Borrowings); PROVIDED,
HOWEVER, that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) the participant shall be
entitled to the benefit of the yield protection provisions contained in SECTION
3.14 and the Right of setoff contained in SECTION 3.12, and (iv) Borrowers shall
continue to deal solely and directly with such Lender in connection with such
Lender's Rights and obligations under this Agreement, and such Lender shall
retain the sole Right to enforce the obligations of Borrowers relating to its
Borrowings and its Note and to approve any amendment, modification, or waiver of
any provision of this Agreement (other than amendments, modifications, or
waivers decreasing the amount of principal of or the rate at which interest is
payable on such Borrowings or Note, waiving or decreasing any fees payable to
such Lender, extending any scheduled principal payment date or date fixed for
the payment of interest on such Borrowings or Note, or extending its
Commitment).
(e) COLLATERAL ASSIGNMENTS. Notwithstanding any other provision set
forth in this Agreement, any Lender may at any time assign and pledge all or any
portion of its Borrowings and its Note to any Federal Reserve Bank as collateral
security pursuant to REGULATION A and any Operating Circular issued by such
Federal Reserve Bank. No such assignment shall release the assigning Lender from
its obligations hereunder.
58
(f) INFORMATION. Any Lender may furnish any information concerning the
Companies in the possession of such Lender from time to time to assignees and
participants (including prospective assignees and participants); provided that
prior to the occurrence of a Default, such Lender shall obtain the consent of
Borrowers prior to furnishing any information to such assignees and participants
(such consent not to be unreasonably withheld).
(g) RIGHT OF FIRST REFUSAL. Documentation Agent agrees that if
Documentation Agent desires to assign all or a portion of its Rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Borrowings, its Note, and its Commitment), then prior to agreeing
to any such assignment, Documentation Agent shall give Administrative Agent
prior written notice thereof (including the terms and conditions for such
proposed assignment). Administrative Agent shall have the right to purchase any
such Rights and obligations from Documentation Agent on the same terms and
conditions by notifying Documentation Agent within ten (10) Business Days of
receipt of such notice. The assignment to Administrative Agent hereunder shall
be effected in accordance with the terms of this SECTION 13.11 (except that such
assignment shall not be subject to the processing fee described in (A)(IV)
above). The foregoing shall not apply to an assignment by Documentation Agent to
any Affiliate of Documentation Agent, PROVIDED THAT any such Affiliates agree
that it shall be subject to the provisions of this SECTION 13.11(G).
(h) AGENTS. Notwithstanding anything contained herein to the contrary,
each Agent shall, at all times prior to its resignation or replacement as an
Agent hereunder, retain a minimum Commitment of $20,000,000 (or, if approved by
Borrower, $15,000,000), or if the Total Commitments have been terminated, then
Notes having outstanding Principal Debt of at least $20,000,000 (or, if approved
by Borrower, $15,000,000).
13.12 DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN CERTAIN
CIRCUMSTANCES. Borrower's obligations under the Loan Documents remain in full
force and effect until the Total Commitment is terminated and the Obligation is
paid in full (except for provisions under the Loan Documents which by their
terms expressly survive payment of the Obligation and termination of the Loan
Documents). If at any time any payment of the principal of or interest on any
Note or any other amount payable by Borrowers or any other obligor on the
Obligation under any Loan Document is rescinded or must be restored or returned
upon the insolvency, bankruptcy, or reorganization of any Borrower or otherwise,
then the obligations of Borrowers under the Loan Documents with respect to that
payment shall be reinstated as though the payment had been due but not made at
that time.
13.13 ENTIRETY. THIS AGREEMENT AND THE OTHER WRITTEN LOAN DOCUMENTS
(EACH AS AMENDED IN WRITING FROM TIME TO TIME) EXECUTED BY BORROWERS AND/OR ANY
CREDIT PARTY REPRESENT THE FINAL AGREEMENT AMONG BORROWERS AND THE CREDIT
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES.
13.14 AMENDMENT AND RESTATEMENT. The parties hereto agree that, on the
Closing Date, after all conditions precedent set forth herein have been
satisfied or waived:
(a) the Obligation represents, among other things, the amendment,
extension, consolidation, and modification of the Obligations outstanding under
the Existing Agreement;
(b) this Agreement is intended to, and does hereby, restate, renew,
extend, amend, modify, supersede, and replace the Existing Agreement; and
59
(c) the Notes executed pursuant to this Agreement amend, renew, extend,
modify, replace, substitute, and supersede in their entirety (but do not
extinguish the Indebtedness arising under) the promissory notes issued pursuant
to the Existing Agreement.
13.15 RESTATEMENT OF EXISTING CREDIT AGREEMENT. On the Closing Date,
(i) all outstanding Liabilities under the Existing Agreement owed to any
"LENDER" that is not continuing as a Lender under this Agreement (each a
"NON-CONTINUING LENDER") shall be repaid in full by Borrower and such
Non-Continuing Lender's commitment under the Existing Agreement shall be
terminated and (ii) with respect to Lenders which are continuing as Lenders
under this Agreement (the "CONTINUING LENDERS"), Administrative Agent shall make
appropriate allocations and adjustments in the initial funding instructions to
the Lenders to reflect the modifications effected by the Loan Documents to each
Continuing Lender's Commitment.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGES FOLLOW.]
60
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT BETWEEN
INNKEEPERS USA TRUST, INNKEEPERS USA LIMITED PARTNERSHIP,
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT,
THE SYNDICATION AGENT DEFINED THEREIN,
THE DOCUMENTATION AGENT DEFINED THEREIN,
THE CO-AGENTS DEFINED THEREIN, AND
THE LENDERS DEFINED THEREIN
EXECUTED as of the day and year first mentioned.
INNKEEPERS USA TRUST, a Maryland real estate investment
trust, as a Borrower
By:
--------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇
General Counsel and Secretary
INNKEEPERS USA LIMITED PARTNERSHIP, a Virginia
limited partnership, as a Borrower
By: INNKEEPERS FINANCIAL CORPORATION, a
Virginia corporation, General Partner
By:
---------------------------------------
▇▇▇▇ ▇▇▇▇▇▇
Vice President and Secretary
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT BETWEEN
INNKEEPERS USA TRUST, INNKEEPERS USA LIMITED PARTNERSHIP,
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT,
THE SYNDICATION AGENT DEFINED THEREIN,
THE DOCUMENTATION AGENT DEFINED THEREIN,
THE CO-AGENTS DEFINED THEREIN, AND
THE LENDERS DEFINED THEREIN
BANK OF AMERICA, N.A.,
as Administrative Agent and a Lender
By:
----------------------------------------
Name:
----------------------------------
Title:
----------------------------------
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT BETWEEN
INNKEEPERS USA TRUST, INNKEEPERS USA LIMITED PARTNERSHIP,
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT,
THE SYNDICATION AGENT DEFINED THEREIN,
THE DOCUMENTATION AGENT DEFINED THEREIN,
THE CO-AGENTS DEFINED THEREIN, AND
THE LENDERS DEFINED THEREIN
CREDIT LYONNAIS NEW YORK BRANCH,
as Syndication Agent and a Lender
By:
-------------------------------------
Name:
--------------------------------
Title:
--------------------------------
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT BETWEEN
INNKEEPERS USA TRUST, INNKEEPERS USA LIMITED PARTNERSHIP,
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT,
THE SYNDICATION AGENT DEFINED THEREIN,
THE DOCUMENTATION AGENT DEFINED THEREIN,
THE CO-AGENTS DEFINED THEREIN, AND
THE LENDERS DEFINED THEREIN
BANK ONE, N.A.,
as Documentation Agent and a Lender
By:
---------------------------------------
Name:
---------------------------------
Title:
---------------------------------
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT BETWEEN
INNKEEPERS USA TRUST, INNKEEPERS USA LIMITED PARTNERSHIP,
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT,
THE SYNDICATION AGENT DEFINED THEREIN,
THE DOCUMENTATION AGENT DEFINED THEREIN,
THE CO-AGENTS DEFINED THEREIN, AND
THE LENDERS DEFINED THEREIN
FIRST UNION NATIONAL BANK,
as a Co-Agent and a Lender
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT BETWEEN
INNKEEPERS USA TRUST, INNKEEPERS USA LIMITED PARTNERSHIP,
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT,
THE SYNDICATION AGENT DEFINED THEREIN,
THE DOCUMENTATION AGENT DEFINED THEREIN,
THE CO-AGENTS DEFINED THEREIN, AND
THE LENDERS DEFINED THEREIN
CIBC INC.,
as a Lender
By:
---------------------------------------
Name:
----------------------------------
Title:
---------------------------------
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT BETWEEN
INNKEEPERS USA TRUST, INNKEEPERS USA LIMITED PARTNERSHIP,
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT,
THE SYNDICATION AGENT DEFINED THEREIN,
THE DOCUMENTATION AGENT DEFINED THEREIN,
THE CO-AGENTS DEFINED THEREIN, AND
THE LENDERS DEFINED THEREIN
PNC BANK, NATIONAL ASSOCIATION,
as a Co-Agent and a Lender
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------